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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 Annual Production 0.80
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours Hubs Sprockets per Unit Annual Production 0.80 19,000 units 0.40 48,000 units Additional information about the company follows: a. Hubs require $25 in direct materials per unit, and Sprockets require $17. 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: Estimated Activity Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Overhead Cost $ 17,100 $140,000 Hubs Sprockets Total 100 3,500 80 0 180 3,500 $322,400 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.
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