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Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow Direct Labor- Hours per Unit Productiorn 0.60 23,000 units 0.20 51,000
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow Direct Labor- Hours per Unit Productiorn 0.60 23,000 units 0.20 51,000 units Annual Hubs Sprockets Additional information about the company follows a. Hubs require $39 in direct materials per unit, and Sprockets require $17. b. The direct labor wage rate is $17 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 Activit Estimated Overhead Cost $ 25,515 Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Hubs Sprockets Total 243 0 3,600 NA 108 135 $162,000 3,600 NA $177,000 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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