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Fogerty Company makes two products titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor - Hours per Unit Annual Production Hubs 0
Fogerty Company makes two productstitanium Hubs and Sprockets. Data regarding the two products follow:
Direct LaborHours per Unit Annual Production
Hubs units
Sprockets units
Additional information about the company follows:
Hubs require $ in direct materials per unit, and Sprockets require $
The direct labor wage rate is $ per hour.
Hubs require special equipment and are more complex to manufacture than Sprockets.
The ABC system has the following activity cost pools:
Activity Cost Pool Activity Measure Estimated Overhead Cost Activity
Hubs Sprockets Total
Machine setups number of setups $
Special processing machinehours $
General factory organizationsustaining $ NA NA NA
Required:
Compute the activity rate for each activity cost pool.
Determine the unit product cost of each product according to the ABC system.
Explain each step in number two
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