Exercise 7-13 (Static) Computing ABC Product Costs [LO7-3, L07-4] Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Hubs Sprockets 0.80 0.40 Annual Production 10,000 units 40,000 units 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: Activity Cost Pool (Activity Measure) Machine setups (number of setups) Estimated Overhead Cost $ 72,000 $ 200,000 $ 816,000 Hubs 100 5,000 NA Special processing (machine-hours) General factory (organization-sustaining) 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. Activity Sprockets 300 0 Total 400 5,000

Exercise 7-13 (Static) Computing ABC Product Costs [LO7-3, LO7-4] Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Additional information about the company follows: a. Hubs require $32 in direct materials per unit, and $ pprockets 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: 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