Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow:

Additional information about the company follows:

a.         Hubs require $32 in direct materials per unit, and Sprockets require $18.

b.         The direct labor wage rate is $15 per hour.

c.         Hubs are more complex to manufacture than Sprockets and they require special processing.

d.         The ABC system has the following activity cost pools:

Required:

1.         Compute the activity rate for each activity cost pool.

2.         Determine the unit cost of each product according to the ABC system, including direct materials and direct labor.

Transcribed Image Text:

Direct Labor-Hours Annual Production per Unit Hubs 0.80 10,000 units Sprockets 0.40 40,000 units