Question
Fogerty Company makes two productstitanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production Hubs 0.70 14,000 units Sprockets
Fogerty Company makes two productstitanium Hubs and Sprockets. Data regarding the two products follow:
| Direct Labor-Hours per Unit | Annual Production | ||
| Hubs | 0.70 | 14,000 | units |
| Sprockets | 0.30 | 54,000 | units |
Additional information about the company follows:
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Hubs require $32 in direct materials per unit, and Sprockets require $19.
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The direct labor wage rate is $17 per hour.
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Hubs require special equipment and are more complex to manufacture than Sprockets.
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The ABC system has the following activity cost pools:
| Estimated | Activity | ||||
| Activity Cost Pool (Activity Measure) | Overhead Cost | Hubs | Sprockets | Total | |
| Machine setups (number of setups) | $ | 15,840 | 80 | 64 | 144 |
| Special processing (machine-hours) | $ | 198,000 | 3,600 | 0 | 3,600 |
| General factory (organization-sustaining) | $ | 204,200 | NA | NA | NA |
Required:
1. Determine the unit product cost of each product according to the ABC system.
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Buck's The Next Step Advanced Medical Coding And Auditing
Authors: Elsevier
1st Edition
0323762778, 978-0323762779
