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Category > Management Posted 21 Jan 2018 My Price 5.00

High-Calibre Products Corporation

EXERCISE 7–9 Computing Activity-Based Costing Product Costs [LO2, LO3]

High-Calibre Products Corporation makes two products: titanium rims and posts. Data regarding the two products follow:

 

 

 

 

 

 

Additional information about the company follows:

a.       Rims require $17 in direct materials per unit, and posts require $10.

b.       The direct labour 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:

 

 

Estimated

 

Activity

Activity Cost Pool

Activity

Measure

Overhead

Cost

Rims

Posts

Total

Machine setups. . . . . . . . . . . . . . . .

Number of setups

$ 21,600

100

80

180

Special processing . . . . . . . . . . . . .

Machine-hours

$ 180,000

4,000

0

4,000

General factory . . . . . . . . . . . . . . . .

Direct labour-hours

$288,000

8,000

16,000

24,000

 

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 materials and direct labour.

Answers

Maurice Tutor
(5)
Status NEW Posted 21 Jan 2018 10:01 PM My Price 5.00

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