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Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours Hubs Sprockets per Unit Annual Production 0.70
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours Hubs Sprockets per Unit Annual Production 0.70 14,000 units 0.30 59,000 units Additional information about the company follows: a. Hubs require $31 in direct materials per unit, and Sprockets require $14. b. The direct labor wage rate is $11 per hour. c. Hubs require special equipment and are more complex to manufacture than Sprockets. d. The ABC system has the following activity cost pools: Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Required: 1. Compute the activity rate for each activity cost pool. Estimated Overhead Cost $ 32,760 $123,000 $ 98,300 Activity Hubs Sprockets Total 140 4,100 112 252 0 4,100 NA NA NA 2. Determine the unit product cost of each product according to the ABC system.
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