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.

Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow Direct Labor- Hours per Unit Production 0.80 20,000 units 0.40 41,000 units Annual Hubs Sprockets Additional information about the company follows a. Hubs require $26 in direct materials per unit, and Sprockets require $16 b. The direct labor wage rate is $17 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 Activit Estimated Overhead Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Cost 115 $209,000 3,800 NA Hubs Sprockets Total 207 0 3,800 NA 24,840 92 $180,000 NA