Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-...
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Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hubs Sprockets Hours per Unit Annual Production 0.90 27,000 units 0.50 53,000 units Additional information about the company follows: a. Hubs require $33 in direct materials per unit, and Sprockets require $14. b. The direct labor wage rate is $18 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: Estimated Activity Overhead Activity Cost Pool (Activity Measure) Cost Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) $ 22,500 Hubs Sprockets Total 125 100 225 $225,500 4,100 0 4,100 $527,800 NA NA 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. Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hubs Sprockets Hours per Unit Annual Production 0.90 27,000 units 0.50 53,000 units Additional information about the company follows: a. Hubs require $33 in direct materials per unit, and Sprockets require $14. b. The direct labor wage rate is $18 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: Estimated Activity Overhead Activity Cost Pool (Activity Measure) Cost Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) $ 22,500 Hubs Sprockets Total 125 100 225 $225,500 4,100 0 4,100 $527,800 NA NA 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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