Performance Products Corporation makes two products, titanium Rims and Posts. Data

Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow:

	Direct Labor-Hours per Unit	Annual Production
Rims	0.70	15,000	units
Posts	0.30	58,000	units

Additional information about the company follows:

a.	Rims require $33 in direct materials per unit, and Posts require $12.
b.	The direct labor wage rate is $18 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:

	Estimated		Activity
Activity Cost Pool (and activity measure)	Overhead Cost		Rims	Posts	Total
Machine setups (number of setups)	$	18,810	95	76	171
Special processing (machine-hours)	$	95,000	3,800	0	3,800
General factory (direct labor-hours)	$	362,700	10,500	17,400	27,900

Required:
1.	Compute the activity rate for each activity cost pool. (Omit the "$" sign in your response.)

Activity Cost Pool	Activity Rate
Machine setups	$	per setup
Special processing	$	per MH
General factory	$	per DLH

2.	Determine the unit cost of each product according to the ABC system. (Do not round intermediate calculations. Round your answers to 2 decimal places. Omit the "$" sign in your response.)

	Rims	Posts
Direct materials	$	$
Direct labor
Overhead
Unit cost	$	$

Explanation:

1.

Activity rates are computed as follows:

Activity Cost Pool	(a) Estimated Overhead Cost		(b) Expected Activity		(a) ÷ (b) Activity Rate
Machine setups	$	18,810	171	setups	$	110	per setup
Special processing	$	95,000	3,800	MHs	$	25	per MH
General factory	$	362,700	27,900	DLHs	$	13	per DLH

2.

Overhead is assigned to the two products as follows:

Rims:

Activity Cost Pool	(a) Activity Rate			(b) Activity		(a) × (b) ABC Cost
Machine setups	$	110	per setup	95	setups	$	10,450
Special processing	$	25	per MH	3,800	MHs		95,000
General factory	$	13	per DLH	10,500	DLHs		136,500
Total						$	241,950

Posts:

Activity Cost Pool	(a) Activity Rate			(b) Activity		(a) × (b) ABC Cost
Machine setups	$	110	per setup	76	setups	$	8,360
Special processing	$	25	per MH	0	MHs		0
General factory	$	13	per DLH	17,400	DLHs		226,200
Total						$	234,560

	Rims		Posts
Direct materials	$	33.00	$	12.00
Direct labor:
$18.00 per DLH × .70 DLHs per unit		12.60
$18.00 per DLH × .30 DLHs per unit				5.40
Overhead:
$241,950 ÷ 15,000 units		16.13
$234,560 ÷ 58,000 units				4.04
Unit cost	$	61.73	$	21.44