Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct...
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Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours per Annual Unit Production 0.90 29,000 units 0.50 51,000 units Hubs Sprockets Additional information about the company follows: a. Hubs require $37 in direct materials per unit, and Sprockets require $19. b. The direct labor wage rate is $18 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 Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Estimated Overhead Cost $ 31,320 $231,000 $ 204,600 Hubs Sprockets Total 145 116 261 4,200 0 4,200 NA NA NA 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
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