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

Direct

Labor-Hours per UnitAnnual

ProductionHubs0.8015,000unitsSprockets0.4059,000units

Additional information about the company follows:

1. Hubs require $37in direct materials per unit, and Sprockets require $12.
2. The direct labor wage rate is $18per 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)$18,00010080180Special processing (machine-hours)$78,0003,90003,900General factory (organization-sustaining)$460,400NANANA

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.