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Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow Direct Labor- Hours per Annual Unit Production 0.90 28,eee units 0.50
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow Direct Labor- Hours per Annual Unit Production 0.90 28,eee units 0.50 52,000 units Hubs Sprockets Additional information about the company follows: a. Hubs require $29 in direct materials per unit, and Sprockets require $19. b. The direct labor wage rate is $14 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: Activity Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Estimated Overhead Cost $ 16, 245 $144,000 $337,200 Hubs 95 4,800 NA Sprockets Total 76 171 @ 4,800 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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