Answered step by step
Verified Expert Solution
Question
00
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 0.60 18,000 units
Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow:
| Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow: |
| Direct Labor-Hours per Unit | Annual Production | ||
| Hubs | 0.60 | 18,000 | units |
| Sprockets | 0.20 | 50,000 | units |
| Additional information about the company follows: |
| a. | Hubs require $37 in direct materials per unit, and Sprockets require $14. |
| 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) | $ | 24,840 | 115 | 92 | 207 |
| Special processing (machine-hours) | $ | 192,500 | 3,500 | 0 | 3,500 |
| General factory (organization-sustaining) | $ | 70,800 | 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
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Calculus
Authors: Ron Larson, Bruce H. Edwards
10th Edition
1285057090, 978-1285057095
