EXERCISE 7-13 Computing ABC Product Costs LO7-3 , LO7-4 Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit 0.80 0.40 Annual Production 10,000 units 40,000 units Hubs Sprockets Additional information about the company follows: a. Hubs require $32 in direct materials per unit, and Sprockets require $18. b. The direct labor wage rate is $15 per hour. c. Hubs require special equipment and are more complex to manufacture than Sprockets. d. The ABC system has the following activity cost pools: Estimated Activity Overhead Hubs Sprockets Activity Cost Pool (Activity Measure) Cost Machine setups (number of setups) $72,000 100 300 Special processing (machine hours) $200,000 5,000 0 General factory (organization-sustaining) $816,000 NA NA Total 400 5,000 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