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Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit 0.70 0.30 Hubs Sprockets Annual Production
Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit 0.70 0.30 Hubs Sprockets Annual Production 11,000 units 46,000 units Additional information about the company follows: a. Hubs require $35 in direct materials per unit, and Sprockets require $19. b. The direct labor wage rate is $14 per hour. c. Hubs are more complex to manufacture than Sprockets and they require special processing d. The company's activity-based absorption costing system has the following activity cost pools: Activity Cost Pool (and Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (Direct labor-hours) Estimated Overhead Cost $ 20,250 $ 171,000 $ 408,500 Expected Activity Hubs Sprockets Total 90 72 162 3,800 0 3,800 7,700 13,800 21,500 Required: 1. Compute the activity rate for each activity cost pool. Activity Cost Pool Activity Rate per Machine setups Special processing General factory setup per MH per DLH 2. Compute the unit product cost for Hubs and Sprockets using activity-based absorption costing.(Do not round intermediate calculations. Round your answers to 2 decimal places.) Hubs Sprockets Direct materials Direct labor Overhead Unit product cost
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