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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 0.50 0.10 Annual Production
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours Hubs Sprockets per Unit 0.50 0.10 Annual Production 11,000 units 56,000 units Additional information about the company follows: a. Hubs require $23 in direct materials per unit, and Sprockets require $13. b. The direct labor wage rate is $20 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 Activity Cost Pool (Activity Measure) Cost Hubs Machine setups (number of setups) $ 25,920 120 Activity Sprockets 96 Total Special processing (machine-hours) $275,000 5,000 0 General factory (organization-sustaining) $ 55,900 NA NA 216 5,000 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. Complete this question by entering your answers in the tabs below.
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