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Exercise 2A-1 Activity-Based Absorption Costing (LO2-5) Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours per Unit
Exercise 2A-1 Activity-Based Absorption Costing (LO2-5) Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours per Unit 0.70 0.30 Hubs Sprockets Annual Production 27,000 units 45,000 units Additional information about the company follows: a. Hubs require $32 in direct materials per unit, and Sprockets require $13. b. The direct labor wage rote is $14 per hour. c. Hubs are more complex to manufacture than Sprockets and they require special processing, d. The company's activity-based absorption costing system has the following activity cost pools: Estimated Expected Activity Overhead Activity Cost Pool (and Activity Measure) Cost Hubs Sprockets Total Machine setups (number of setups) $ 13,680 80 64 144 Special processing (machine-hours) $ 133,000 3,800 3,800 General factory (irect labor-hours) $ 615,600 18,900 13,500 32,400 Required: 1. Compute the activity rate for each activity cost pool. 2. Compute the unit product cost for Hubs and Sprockets using activity-based absorption costing Complete this question by entering your answers in the tabs below. Required 1 Required 2 Hubs Compute the unit product cost for Hubs and Sprockets using activity-based absorption costing. (Do not round Intermediate calculations. Round your answers to 2 decimal places.) Sprockets Direct materials Direct labor Manufacturing overhead Unit product cost $ 0.00 $ 0.00
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