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Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit 0.80 0.40 Annual Production 15,000 units 49,000
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit 0.80 0.40 Annual Production 15,000 units 49,000 units Hubs Sprockets Additional information about the company follows: a. Hubs require $35 in direct materials per unit, and Sprockets require $18. 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 Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Estimated Overhead Cost $ 13,680 $ 98,000 $ 325,600 Hubs 80 4,900 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. Activity Sprockets 64 0 Total 144 4,900 Fogerty Company makes two products - titanium Hubs and Sprockets. Data regarding the two products follow: Additional information about the company follows: a. Hubs require $35 in direct materials per unit, and Sprockets require $18. 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: 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
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit 0.80 0.40 Annual Production 15,000 units 49,000 units Hubs Sprockets Additional information about the company follows: a. Hubs require $35 in direct materials per unit, and Sprockets require $18. 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 Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Estimated Overhead Cost $ 13,680 $ 98,000 $ 325,600 Hubs 80 4,900 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. Activity Sprockets 64 0 Total 144 4,900
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