ogerty Company makes two productstitanium Hubs and Sprockets. Data regarding the two products follow:

Direct

Labor-Hours per UnitAnnual

ProductionHubs0.9028,000unitsSprockets0.5054,000units

Additional information about the company follows:

1. Hubs require $32 in direct materials per unit, and Sprockets require $19.
2. The direct labor wage rate is $17 per hour.
3. Hubs require special equipment and are more complex to manufacture than Sprockets.
4. The ABC system has the following activity cost pools:

EstimatedActivityActivity Cost Pool (Activity Measure)Overhead CostHubsSprocketsTotalMachine setups (number of setups)$20,52012096216Special processing (machine-hours)$110,0004,40004,400General factory (organization-sustaining)$322,200NANANA

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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