Fogerty Company makes two products, titanium Hubs and Sprockets.Data regarding the two products follow:
| Direct
Labor-Hours per Unit | Annual
Production |
| Hubs | 0.80 | 12,000 | units |
| Sprockets | 0.40 | 43,000 | units |
|
Additional information about the company follows:
a. Hubs require $21 in direct materials per unit, and Sprocketsrequire $11.
b. The direct labor wage rate is $17 per hour.
c. Hubs are more complex to manufacture than Sprockets and theyrequire special equipment.
d. The ABC system has the following activity cost pools:
| Estimated | Activity |
| Activity CostPool (Activity Measure) | Overhead Cost | Hubs | Sprockets | Total |
| Machine setups(number of setups) | $ | 17,955 | 95 | 76 | 171 |
| Specialprocessing (machine-hours) | $ | 161,000 | 4,600 | 0 | 4,600 |
| General factory(organization-sustaining) | $ | 302,000 | NA | NA | NA |
|
|
| | Activity Cost Pool | Activity Rate | | | Machinesetups | | per setup | | Special processing | | perMH |
|
|
| | Hubs | Sprockets | | Directmaterials | | | | Direct labor | | | | Overhead | | | | Unitcost | | |
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