Forgery Company make two products, titanium Hubs and sprocket. Data regarding the two products follow:

	Direct Labor-Hours per Unit	Annual Production
Hubs	0.8	10,000 units
Sprockets	0.40	40,000 units

Additional information about the company follows:

Hubs require #32 in direct material per unit, and sprockets require $18.

The direct labor wage rate is $15 per hour

Hubs are more complex to manufacture than sprockets and they require special equipment.

The ABC system has the following activity cost pools:

Activity

Activity Cost Pool (activity measure)	Estimated Overhead Cost	Hubs	Sprocket	Total
Machine setups (number of setups	$72,000	100	300	400
Special processing (machine-hours)	$200,000	5,000	0	5,000
General factory (organization sustaining)	$816,000	NA	NA	NA

Required

Compute the activity rate for each activity cost pool. Did you compute an activity rate for all of the activity cost pool? Why?

Determine the unit product cost of each product according to the ABC system.