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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
EXERCISE 7–12 Computing ABC Product Costs [LO3, LO4]
Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow:
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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:
Â
Â

Â
Required:
1.      Compute the activity rate for each activity cost pool.
2.      Determine the unit cost of each product according to the ABC system, including direct materi- als and direct labor.
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