Required information Exercise 4-8 (Static) Computing ABC Product Costs [LO4-2, LO4-3] (The following information applies to the questions displayed below. Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow. Rins Posts Direct Labor Hours per unit 0.40 0.20 Annual Production 20,000 units 80,000 units Additional information about the company follows: a. Rims require $17 in direct materials per unit, and Posts require $10. b. The direct labor wage rate is $16 per hour. c. Rims are more complex to manufacture than Posts and they require special equipment. d. The ABC system has the following activity cost pools: Total Activity Cost Pool Machine setups Special processing General factory 180 Estimated Activity Estimated Overhead Cost Rins Posts $ 21,600 100 80 $ 180,000 4,000 0 $ 288,000 8,000 16,000 Nctivity Measure Number of setups Machine-hours Direct Labor-hours 4,000 24,000 Exercise 4-8 (Static) Part 1 Required: 1. Compute the activity rate for each activity cost pool. Activity Cost Pool Machine setups Special processing General factory Activity Rate per setup per MH per DLH ! Required information Exercise 4-8 (Static) Computing ABC Product Costs (L04-2, LO4-3] (The following information applies to the questions displayed below.) Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Direct Labor- Hours per unit 0.40 0.20 Annual Production 20,000 units 80,000 units Rims Posts Additional information about the company follows: a. Rims require $17 in direct materials per unit, and Posts require $10. b. The direct labor wage rate is $16 per hour. c. Rims are more complex to manufacture than Posts and they require special equipment d. The ABC system has the following activity cost pools: Activity Cost Pool Machine setups Special processing General factory Activity Measure Number of setups Machine-hours Direct labor-hours Estimated Activity Estimated Overhead Cost Rims Posts $ 21,600 100 80 $ 180,000 4,000 0 $ 288,000 8,000 16,000 Total 180 4,000 24,000 Exercise 4-8 (Static) Part 2 2. Determine the unit product cost of each product according to the ABC system. (Do not round intermediate calculations. Round your final answers to 2 decimal places.) Unit product cost of Rims Unit product cost of Posts Exercise 4-10 (Static) Contrasting ABC and Conventional Product Costs (L04-2, LO4-3, LO4-4) Rocky Mountain Corporation makes two types of hiking boots-Xactive and Pathbreaker. Data concerning these two product lines appear below: Direct materials per unit Direct labor cost per unit Direct labor-hours per unit Estimated annual production and sales Xactive $ 64.80 $ 18.20 1.4 DLHS 25,000 units Pathbreaker $ 51.00 $ 13.00 1.0 DLHS 75,000 units The company has a conventional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below: Estimated total manufacturing overhead Estimated total direct labor-hours $ 2,200,000 110,000 DLHS Required: 1-a. Compute the predetermined overhead rate based on direct labor-hours. 1-b. Using the predetermined overhead rate and other data from the problem, determine the unit product cost of each product. 2. The company is considering replacing its conventional costing system with an activity-based costing system that would assign its manufacturing overhead to the following four activity cost pools: Activity Cost Pools and Activity Measures) Supporting direct labor (direct labor-hours) Batch setups (setups) Product sustaining number of products) General factory (machine-hours) Total manufacturing overhead cost Estimated Overhead Cost $ 797,500 680,000 650,000 72,500 $ 2,200,000 Expected Activity Xactive Pathbreaker Total 35,000 75,000 110,000 250 150 400 1 1 2 2,500 7,500 10,000 Determine the activity rate for each of the four activity cost pools. 3. Using the activity rates and other data from the problem, determine the unit product cost of each product. Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Req 2 Reg 3 Compute the predetermined overhead rate based on direct labor-hours. Predetermined overhead rate per DLH