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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

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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 0.60 16,000 units 0.20 49,000 units Annual Production Hubs Sprockets Additional information about the company follows a. Hubs require $20 in direct materials per unit, and Sprockets require $12 b. The direct labor wage rate is $19 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 Activit Estimated Overhead Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustainin Hubs Sprockets Total Cost $ 18,810 95 $288,000 4,800 NA 76 0 4,800 $127,200 NA NA Required 1. Compute the activity rate for each activity cost pool 2. Determine the unit product cost of each product according to the ABC system

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