Question

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

Answer 1

Answer:

1.- 68 per setup

   26.08 per machien hour

   15.95 per labor hour

2)

Rims unit cost: $ 32.92

Posts: $ 25.40

Explanation:

First we calcualte the activity rates:

$\left[\begin{array}{ccccc} Activity& Driver& cost& Total& Rate\\ Machine Setups&setups&27200&400&68\\ Special processing&machine-hours&130400&5000&26.08\\ General factory&labor-hours&1053000&66000&15.95\\\end{array}\right]$

Then, we solve for the total overhead allocated:

$\left[\begin{array}{cccccc}Activity&Posts&Rims&Allocate Rims&Allocate Posts\\Machine Setups&280&120&8160&19040\\Special processing&0&5000&130400&0\\General factory&61000&5000&79772.73&973227.27\\Total&&&218332.73&992267.27\\\end{array}\right]$

We now divide by the amount produced to get the manufacting overhead per unit.

218,332.73  / 22,000 = 9.924215‬ = 9.92

992,267.27 / 80,000 = 12,403340 = 12.40

Now, we calcualte labor per unit:

0.6 x $15 = 9

0.2 x $15 = 3

Rims unit cost:

14 materials + 9 labor + 9.92 overhead = 32.92

Posts:

10 materials + 3 labor + 12.40 overhead = 25.40