Question
Fogerty Company makes two productstitanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production Hubs 0.60 12,000 units Sprockets
Fogerty Company makes two productstitanium Hubs and Sprockets. Data regarding the two products follow:
| Direct Labor-Hours per Unit | Annual Production | ||
| Hubs | 0.60 | 12,000 | units |
| Sprockets | 0.20 | 43,000 | units |
Additional information about the company follows:
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Hubs require $25 in direct materials per unit, and Sprockets require $17.
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The direct labor wage rate is $11 per hour.
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Hubs require special equipment and are more complex to manufacture than Sprockets.
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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) | $ | 31,590 | 135 | 108 | 243 |
| Special processing (machine-hours) | $ | 88,000 | 4,400 | 0 | 4,400 |
| General factory (organization-sustaining) | $ | 58,800 | NA | NA | NA |
Required:
1. Compute the activity rate for each activity cost pool.
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2. Determine the unit product cost of each product according to the ABC system. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
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Health Care Marketing Audit A Complete Guide
Authors: Gerardus Blokdyk
2020 Edition
0655947469, 978-0655947462
