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Fergi Company makes two products, Solos and Hans. Data regarding the two products follow: Direct Annual Labor Hours per Unit Production Hans 0.80 10,000 units
Fergi Company makes two products, Solos and Hans. Data regarding the two products follow: Direct Annual Labor Hours per Unit Production Hans 0.80 10,000 units Solos 0.40 40,000 units Additional information about the company follows: 3. Hans require $32 in direct materials per unit, and Solos require $18. b. The direct labor wage rate is $15 per hour. c. Hans are more complex to manufacture than Solos and they require special processing d. The ABC system has the following activity cost pools: Activity Activity Estimated Activity Cost Pool Measure Overhead Hans Solos Total Cost Machine Number of $72,000 100 300 400 Setup setups Special Machine $200,000 5,000 0 5,000 Processing hours General Direct $816,000 8000 ? 24000 Factory labor hours Instructions: a. Fill up the missing information marked with "?" i.e. find the direct labor hours required for Solos and the total for the company. b. Compute the activity rate for each activity cost pool. c. Determine the per unit cost of each product according to the ABC system
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