Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production Hubs 0.70 20,000 units

Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow:

Direct Labor-Hours per Unit Annual Production
Hubs 0.70 20,000 units
Sprockets 0.30 41,000 units

Additional information about the company follows:
a.

Hubs require $37 in direct materials per unit, and Sprockets require $12.

b. The direct labor wage rate is $19 per hour.
c. Hubs are more complex to manufacture than Sprockets and they require special equipment.
d. The ABC system has the following activity cost pools:

Estimated Activity
Activity Cost Pool (Activity Measure) Overhead Cost Hubs Sprockets Total
Machine setups (number of setups) $ 27,945 115 92 207
Special processing (machine-hours) $ 230,000 4,600 0 4,600
General factory (organization-sustaining) $ 173,900 NA 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. (Round intermediate calculations and final answers to 2 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Theory And Practice

Authors: C. William Thomas, Bart Ward, Emerson Henke

3rd Edition

0534920748, 978-0534920746

More Books

Students also viewed these Accounting questions

Question

5. Recognize your ability to repair and let go of painful conflict

Answered: 1 week ago