Question
Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production Hubs 0.80 14,000 units
Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production Hubs 0.80 14,000 units Sprockets 0.40 46,000 units Additional information about the company follows: a. Hubs require $38 in direct materials per unit, and Sprockets require $11. b. The direct labor wage rate is $14 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) $ 22,230 95 76 171 Special processing (machine-hours) $ 108,000 3,600 0 3,600 General factory (organization-sustaining) $ 121,600 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.)
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