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Fogerty Company makes two products-Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours Hubs per Unit 0.90 0.50 Annual Production 10,000 units
Fogerty Company makes two products-Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours Hubs per Unit 0.90 0.50 Annual Production 10,000 units 57,000 units Sprockets Additional information about the company follows: a. Hubs require $21 in direct materials per unit, and Sprockets require $19. b. The direct labor wage rate is $11 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: Estimated Overhead Expected Activity Activity Cost Pool (and Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (Direct labor-hours) Cost $ 17,100 $ 253,000 Hubs 95 4,600 Sprockets 76 Total 171 0 4,600 $ 675,000 9,000 28,500 37,500 Required: 1. Compute the activity rate for each activity cost pool. 2. Compute the unit product cost for Hubs and Sprockets using activity-based absorption costing. Complete this question by entering your answers in the tabs below.
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