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1. Korg, Inc makes two products - platinum-based tacks and hinges. Data regarding the two products follow: Annual Production Direct Labor Hours Per Unit Hinges....
1. Korg, Inc makes two products - platinum-based tacks and hinges. Data regarding the two products follow: Annual Production Direct Labor Hours Per Unit Hinges.... Additional information about the company follows: a. Hinges require $16 in direct materials per unit, and tacks require $9. b. The direct labor wage rate is $10 per hour. c. Hinges require special equipment and are more complex to manufacture than Tacks d. The ABC system has the following cost pools: Estimated Overhead Costs $36,000 $100,000 $408,000 Activity Activity Cost Pool (Activity Measure) Technology preparations (number of setups) Custom processing (machine hours) General factory (organizational sustaining) Hinges Tacks Total 150 200 0 2,500 NA NA 50 2,500 NA Required: 1. Compute the activity rate for each activity cost pool. Did you compute an activity rate for all of the activity cost pools? Why? 2 Determine the unit product cost of each product according to the ABC system
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