Question
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Hubs. Sprockets Direct Labor-Hours: per Unit 0.80 0.40 Annual Production
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Hubs. Sprockets Direct Labor-Hours: per Unit 0.80 0.40 Annual Production 16,000 units 59,000 units Additional information about the company follows: a. Hubs require $33 in direct materials per unit, and Sprockets require $12. b. The direct labor wage rate is $19 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. Cost $ 18,720 Estimated Overhead Hubs Activity Sprockets Total 80 64 4,800 0 1441 4,800 NA NA NAT $ 216,000 $ 414,000 2. Determine the unit product cost of each product according to the ABC system. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the activity rate for each activity cost pool. Activity Cost Pool Activity Rate Machine setups Special processing per setup per MH
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