Item

4

10

points

Time Remaining 1 hour 58 seconds

01:00:58

Item4

Item 4 10 points

Time Remaining 1 hour 58 seconds

01:00:58

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

Direct

Labor-Hours per UnitAnnual

ProductionHubs0.5018,000unitsSprockets0.1059,000units

Additional information about the company follows:

1. Hubs require $37in direct materials per unit, and Sprockets require $10.
2. The direct labor wage rate is $13per hour.
3. Hubs require special equipment and are more complex to manufacture than Sprockets.
4. The ABC system has the following activity cost pools:

EstimatedActivityActivity Cost Pool (Activity Measure)Overhead CostHubsSprocketsTotalMachine setups (number of setups)$19,6659576171Special processing (machine-hours)$144,0004,80004,800General factory (organization-sustaining)$97,500NANANA

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.