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Exercise 2A-1 (Algo) Activity-Based Absorption Costing [LO2-5] Fogerty Company makes two products-Hubs and Sprockets. Data regarding the two products follow: Hubs Sprockets Direct Labor-Hours
Exercise 2A-1 (Algo) Activity-Based Absorption Costing [LO2-5] Fogerty Company makes two products-Hubs and Sprockets. Data regarding the two products follow: Hubs Sprockets Direct Labor-Hours per Unit Annual Production 0.90 18,000 units 0.50 44,000 units. Additional information about the company follows: a. Hubs require $33 in direct materials per unit, and Sprockets require $20. 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: Activity Cost Pool (and Activity Measure) Special processing (nachine-hours) Machine setups (number of setups) General factory (Direct labor-hours) Estimated Overhead Cost Hubs Expected Activity Sprockets Total $ 19,800 $225,000 110 $ 267,400 4,500 16,200 88 0 1981 4,500. 22,000 38,200 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. 20 Activity Cost Pool Machine setups Special processing General factory Activity Rate per setup per MH per DLH Required 1 Required 2 > 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 11 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.) Direct materials Direct labor Manufacturing overhead Unit product cost Hubs Sprockets < Required 1 Required 2
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