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Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours per Unit Production 0.80 28,000 units 0.40 56,000
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours per Unit Production 0.80 28,000 units 0.40 56,000 units Annual Hubs Sprockets Additional information about the company follows a. Hubs require $22 in direct materials per unit, and Sprockets require $17 b. The direct labor wage rate is $12 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 Activit Estimated Overhead Cost $ 18,000 Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Hubs Sprockets Total 180 100 $175,500 3,900 NA 80 0 3,900 NA $246,400 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
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