Question
Fogerty Company makes two productstitanium Hubs and Sprockets. Data regarding the two products follow: direct labor hours per unit annual production Hubs 0.60 22,000 units
Fogerty Company makes two productstitanium Hubs and Sprockets. Data regarding the two products follow:
| direct labor hours per unit | annual production | |
| Hubs | 0.60 | 22,000 units |
| Sprockets | 0.20 | 42,000 units |
Additional information about the company follows:
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Hubs require $20 in direct materials per unit, and Sprockets require $15.
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The direct labor wage rate is $10 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:
| Activity Cost Pool (activity measure) | Estimated Overhead Cost | Activity | Activity | Activity |
| Hubs | Sprockets | Total | ||
| Machine setups (number of setups) | $19,000 | 110 | 88 | 198 |
| Special processing (machine hours) | $203,500 | 3,700 | 0 | 3,700 |
| General factory | $172,800 | N/A | N/A | N/A |
Required:
1. Compute the activity rate for each activity cost pool (ANSWERED)
| Activity Cost Pool | Activity rate | Activity rate |
| Machine setups | $100 | per setup |
| Special processing | $55 | per MH |
*Please assist with 2*
2. Determine the unit product cost of each product according to the ABC system.
| Hubs | Sprockets | |
| Direct materials | ? | ? |
| Direct labor | ? | ? |
| Overhead | ? | ? |
| Unit cost | ? | ? |
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