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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- Hour por 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- Hour por Unit 0.60 0.20 Hubs Sprockets Annual Production 23,000 units 45,000 units Additional information about the company follows: a. Hubs require $21 in direct materials per unit, and Sprockets require $15. b. The direct labor wage rate is $15 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 retivity Measure Hubs Sprockets Total Machine setupa number of setupa) $ 17,820 90 Special processing machine-hours) $120.000 4,000 4.000 General factory (Direct labor-hours) $257, 400 13,800 9.600 23,400 Cont 162 72 o 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 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 Compute the activity rate for each activity cost pool. Activity Rate per setup Activity Cost Pool Machine setups Special processing General factory por MH per DLH Complete this question by entering your answers in the tabs below. Required 1 Required 2 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.) Hubs Sprockets Direct materials Direct labor Manufacturing overhead Unit product cost
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