connect Appendix 2A: Exercises, Problems, and Case EXERCISE 2A-1 Activity-Based Absorption Costing LO2-5 Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow Direct Labor-Hours per Unit 0.80 0.40 Annual Hubs Sprockets.. 10,000 units 40,000 units Additional information about the company follows: a. Hubs require S32 in direct materials per unit, and Sprockets require S18 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 company's activity-based absorption costing system has the following activity cost pools: Expected Activity Estimated Overhead Cost Hubs SprocketsTotal 100 Activity Cost Pool (and Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (Direct labor-hours) $72,000 $200,000 5, 400 0 5,000 $816,000 8,000 6,000 24,000 300 5,000 Required. . Compute the activity rate for each activity cost pool. 2. Compute the unit product cost for Hubs and Sprockets using activity-based absorption costing