Question
QUESTION 2 Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production 13,000 units
QUESTION 2 Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production 13,000 units 51,000 units Hubs Sprockets 0.80 0.40 Additional information about the company follows: 1. Hubs require $28 in direct materials per unit, and Sprockets require $12. 2. The direct labor wage rate is $12 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: Estimated Overhead Cost $ 33,930 $264,000 $ 398,000 Activity 145 116 Hubs Sprockets Total 261 4,800 4,800 0 NA NA NA Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) 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. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph Arial v 10pt > III A 7 Ix 06
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