Question

Fogerty Company makes two products—titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production Hubs 0.60 22,000 units Sprockets 0.20 55,000 units Additional information about the company follows:

a. Hubs require $35 in direct materials per unit, and Sprockets require $17.

b. The direct labor wage rate is $19 per hour.

c. Hubs are more complex to manufacture than Sprockets and they require special processing.

d. The company’s activity-based absorption costing system has the following activity cost pools: Estimated Expected Activity Activity Cost Pool (and Activity Measure) Overhead Cost Hubs Sprockets Total Machine setups (number of setups) $ 29,160 135 108 243 Special processing (machine-hours) $ 133,000 3,800 0 3,800 General factory (Direct labor-hours) $ 435,600 13,200 11,000 24,200

Required: 1. Compute the activity rate for each activity cost pool.

2. Compute the unit product cost for Hubs and Sprockets using activity-based absorption costing. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Answer 1

.