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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 0.70 0.30 Annual Production 22,000
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours Hubs Sprockets per Unit 0.70 0.30 Annual Production 22,000 units 43,000 units Additional information about the company follows: a. Hubs require $33 in direct materials per unit, and Sprockets require $19. b. The direct labor wage rate is $14 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: Estimated Overhead Cost $ 31,590 Hubs Activity Sprockets 135 108 4,800 0 NA NA Total 243 4,800 NA Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) $ 120,000 $ 247,600 General factory (organization-sustaining) 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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