[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 Annual Production Rims 0.30 26,000 units Posts 0.50 70,000 units Additional information about the company follows: Rims require $15 in direct materials per unit, and Posts require $11. 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 $ 32,900 60 140 200 Special processing Machine-hours $ 114,800 4,000 0 4,000 General factory Direct labor-hours $ 1,404,000 6,000 72,000 78,000Required:1. Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.)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.)

1) activity rate per:

2) unit cost per product

Explanation:

                Direct Labor-Hours per unit    Annual Production   Total

Rims                    0.30                                26,000 units            7,800

Posts                   0.50                                70,000 units           35,000

Rims require $15 in direct materials per unit, and Posts require $11.

The direct labor wage rate is $15 per hour.

The ABC system has the following activity cost pools:

                                                               Estimated Activity

Activity                       Activity             Estimated       Rims   Posts    Total

cost pool                    measure           OH cost

Machine setups         # of setups       $32,900         60       140       200

Special processing    machine H       $114,800      4,000       0       4,000

General factory          direct LH      $1,404,000      6,000 72,000 78,000

activity rate per:

machine setup = $32,900 / 200 = $164.50 per setup

special processing = $114,800 / 4,000 = $28.70 per machine hour

general factory = $1,404,000 / 78,000 = $18 per direct labor hour

total machine setup costs assigned to rims = $9,870 / 26,000 units = $0.38 per unit

total special processing costs assigned to rims = $114,800 / 26,000 units = $4.42 per unit

total general factory costs assigned to rims = $108,000 / 26,000 units = $4.15 per unit

direct labor cost per unit = 0.3 x $15 = $4.50

direct materials = $15

total cost per rim = $28.45

total machine setup costs assigned to posts = $23,030 / 70,000 units = $0.33 per unit

total special processing costs assigned to posts = $0 / 70,000 units = $0 per unit

total general factory costs assigned to posts = $1,296,000 / 70,000 units = $18.51 per unit

direct labor cost per unit = 0.5 x $15 = $7.50

direct materials = $11

total cost per post = $37.34

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