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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
43,000 units
Additional information about the company follows:
a. Hubs require $33 in direct materials per unit, and Sprockets require $17.
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:
Activity Cost Pool (Activity Measure)
Estimated Overhead Cost
Activity
Total
Machine setups (number of setups)
$13,680
80
64
144
Special processing (machine-hours)
$282,000
4,700
0
General factory (organization-sustaining)
$90,600
NA
Determine the unit product cost of each product according to the ABC system.
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