A company makes two products, titanium hubs and sprokets. Data regarding the two products follow

	Direct labor hours per unit	Annual production
Hubs	0.70	10,000 units
Sprokets	0.50	40,000 units

a. Hubs requre $28 in direct materials per unit, and sprokets require $16

b. The direct labor wage rate is $20 per hour

c. Hubs are more complex to manufacture than sprockets and they require special equipment

d. the ABC system has the following activity cost pools

Activity cost pool (activity measure)	Estimated overhead cost	Hubs activity	Sprokets activity	Total acivity
Machine setups (number of setups)	$68,000	100	300	400
Special processing (machine hours)	$250,000	5,000	0	5,000
General Factory (organization-sustaining)	$816,000	NA	NA	NA

1. Compute the activiy rate for each cost pool. Did you compute an atctivity rate for all the activity cost pools? WHY?

2. Determine the unit product cost of each product according to the ABC system