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Artyom0805 [142]
3 years ago
15

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

or-Hours per unit Annual Production Rims 0.20 21,000 units Posts 0.70 79,000 units Additional information about the company follows: Rims require $19 in direct materials per unit, and Posts require $15. The direct labor wage rate is $15 per hour. Rims are more complex to manufacture than Posts and they require special equipment. The ABC system has the following activity cost pools: Estimated Activity Activity Cost Pool Activity Measure Estimated Overhead Cost Rims Posts Total Machine setups Number of setups $ 34,760 110 90 200 Special processing Machine-hours $ 136,670 1,000 0 1,000 General factory Direct labor-hours $ 819,000 9,000 54,000 63,000
Required:
Compute the activity rate for each activity cost pool.
Business
1 answer:
alina1380 [7]3 years ago
5 0

Answer:

Machine setups= $173.8 per setup

Special processing= $136.67 per machine hour

General factory= $13 per direct labor hour

Explanation:

<u>To calculate the activities cost rates, we need to use the following formulas:</u>

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Machine setups= 34,760 / 200= $173.8 per setup

Special processing= 136,670 / 1,000= $136.67 per machine hour

General factory= 819,000 / 63,000= $13 per direct labor hour

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