Fogerty Company makes two productstitanium Hubs and Sprockets. Data regarding the two products follow:
tableDirect,tableLaborHours perUnitAnnual ProductionHubs unitsSprockets units
Additional information about the company follows:
a Hubs require $ in direct materials per unit, and Sprockets require $
b The direct labor wage rate is $ 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:
tableEstimated Overhead,,Activity,Activity Cost Pool Activity MeasureCost,Hubs,Sprockets,TotalMachine setups number of setups$Special processing machinehours$General factory organizationsustaining$NANANA
Required:
Compute the activity rate for each activity cost pool.
Determine the unit product cost of each product according to the ABC system.
