Determine the total cost of Rims according to the ABC system

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Reference no: EM132686672

Problem - Snow Products Corporation makes two products, titanium Rims and Posts. Additional information about the company follows:

a. Rims require $15 in direct materials per unit, and Posts require $12.

b. The direct labor wage rate is $18 per hour.

Following are the data regarding the two products and ABC costing: Data Regarding the two product follows

	Direct Labor-hour per unit	Annual Production
Rims	0.6	40,000
Posts	0.4	60,000

Activity Cost pool:

Activity cost pool (and activity measure)	Estimated Overhead costs	Activity
Activity cost pool (and activity measure)	Estimated Overhead costs	Rims	Posts	Total
Machine setups (number of setups)	32,000	60	100	160
Special Processing (machine hours)	250,000	4,000	1,000	5,000
General factory (direct labor hours)	360,000	24,000	24,000	48,000

Required - Determine the total cost of Rims according to the ABC system. Show details of your working.

Reference no: EM132686672

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