Question
Week 4 question 3 Fogerty Company makes two productstitanium Hubs and Sprockets. Data regarding the two products follow: Direct labor hours Annual production Hubs 0.60
Week 4 question 3
Fogerty Company makes two productstitanium Hubs and Sprockets. Data regarding the two products follow:
| Direct labor hours | Annual production | |
| Hubs | 0.60 | 22,000 units |
| Sprockets | 0.20 | 42,000 units |
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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 | Activity | Activity | ||
| Activity cost pool (activity measure) | Estimated overhead cost | Hubs | Sprockets | Total |
| Machine setups (# of setups) | $19,000 | 110 | 88 | 198 |
| Special processing (machine hours) | $203,500 | 3,700 | 0 | 3,700 |
| General factory (organization-sustaining) | $172,800 | NA | NA | NA |
2. Determine the unit product cost of each product according to the ABC system
| Hubs | Sprockets | |
| Direct materials | $20.00 | $15,00 |
| Direct labor | 6.00 | 2.00 |
| Overhead | ? | ? |
| Unit cost | $35.72 | $17.20 |
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Payroll Accounting 2020
Authors: Jeanette Landin
6th Edition
1260247961, 9781260247961
