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Fogerty Company makes two productstitanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per UnitAnnual ProductionHubs0.7029,000unitsSprockets0.3048,000units Additional information about the company follows:

Fogerty Company makes two productstitanium Hubs and Sprockets. Data regarding the two products follow:

Direct

Labor-Hours per UnitAnnual

ProductionHubs0.7029,000unitsSprockets0.3048,000units

Additional information about the company follows:

  1. Hubs require $33in direct materials per unit, and Sprockets require $15.
  2. The direct labor wage rate is $12per hour.
  3. Hubs require special equipment and are more complex to manufacture than Sprockets.
  4. The ABC system has the following activity cost pools:

EstimatedActivityActivity Cost Pool (Activity Measure)Overhead CostHubsSprocketsTotalMachine setups (number of setups)$21,8709072162Special processing (machine-hours)$230,0004,60004,600General factory (organization-sustaining)$308,300NANANA

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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