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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 0.80 0.40 Annual Production
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours Hubs Sprockets per Unit 0.80 0.40 Annual Production 18,000 units 57,000 units Additional information about the company follows: a. Hubs require $20 in direct materials per unit, and Sprockets require $13. b. The direct labor wage rate is $13 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 Activity Cost Pool (Activity Measure) Cost Hubs Sprockets Machine setups (number of setups) Special processing (machine-hours) $ 22,680 105 84 $ 110,000 4,400 0 $ 310,800 NA Total 189 4,400 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. 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 < Required 1 Required 2 >
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