Question
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours per Annual Unit Production Hubs Sprockets 0.70
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours per Annual Unit Production Hubs Sprockets 0.70 28,000 units 0.30 55,000 units Additional information about the company follows: a. Hubs require $22 in direct materials per unit, and Sprockets require $15. b. The direct labor wage rate is $17 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 Activity Overhead Activity Cost Pool (Activity Measure) Cost Hubs Sprockets Total Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) $ 23,940 140 112 252 $156,000 $283,600 3,900 0 3,900 NA NA 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. Required 1 Required 2 Compute the activity rate for each activity cost pool. Activity Cost Pool Activity Rate Machine setups per setup Special processing per MH Required 1 Required 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.) Hubs Direct materials Direct labor Sprockets Overhead Unit cost $ 0.00 $ 0.00
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