Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours...

 

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Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit 0.60 0.20 Hubs Sprockets Additional information about the company follows: Annual Production 18,000 units 45,000 units a. Hubs require $35 in direct materials per unit, and Sprockets require $19. b. The direct labor wage rate is $19 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: Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Required 1 Required 2 Complete this question by entering your answers in the tabs below. Estimated Overhead 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. Compute the activity rate for each activity cost pool. Activity Cost Pool Activity Rate Machine setups per setup Special processing per MH Cost $ 30,375 $ 282,000 $ 163,800 < Required 1 Hubs 125 4,700 NA Required 2 > Activity Sprockets 100 NA Total 225 4,700 NA Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit 0.60 0.20 Hubs Sprockets Additional information about the company follows: Annual Production 18,000 units 45,000 units a. Hubs require $35 in direct materials per unit, and Sprockets require $19. b. The direct labor wage rate is $19 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: Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Required 1 Required 2 Complete this question by entering your answers in the tabs below. Estimated Overhead 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. Compute the activity rate for each activity cost pool. Activity Cost Pool Activity Rate Machine setups per setup Special processing per MH Cost $ 30,375 $ 282,000 $ 163,800 < Required 1 Hubs 125 4,700 NA Required 2 > Activity Sprockets 100 NA Total 225 4,700 NA

Answer rating: 100% (QA)

Answer To compute the activity rate for each activity cost pool we divide the total cost of each pool by the total activity measure Lets calculate 1 Activity Rate for Machine Setups Activity Rate Tota... View the full answer