Question

#7: 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 17,000 units Sprockets 0.20 44,000 units ________________________________________ Additional information about the company follows: a. Hubs require $35 in direct materials per unit, and Sprockets require $11. b. The direct labor wage rate is $12 per hour. c. Hubs are more complex to manufacture than Sprockets and they require special equipment. d. The ABC system has the following activity cost pools: Estimated Activity ________________________________________ Activity Cost Pool (Activity Measure) Overhead Cost Hubs Sprockets Total Machine setups (number of setups) $ 23,085 135 108 243 Special processing (machine-hours) $ 150,000 5,000 0 5,000 General factory (organization-sustaining) $ 98,200 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. (Round intermediate calculations and final answers to 2 decimal places.)

Answer 1