Fogerty company makes two products titanium hubs and

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Reference no: EM13580831

Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow:

	Direct Labor-Hours per Unit	Annual Production
Hubs	0.90	25,000 units
Sprockets	0.50	49,000 units

Additional information about the company follows:

a.	Hubs require $26 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 ABC system has the following activity cost pools:

		Estimated Overhead		Activity
Activity Cost Pool	Activity Measure	Cost		Hubs	Sprockets	Total
Machine setups	Number of setups	$	17,100	95	76	171
Special processing	Machine-hours	$	132,000	4,400	0	4,400
General factory	Direct labor-hours	$	423,000	22,500	24,500	47,000

Requirement 1:

Compute the activity rate for each activity cost pool.

Activity Cost Pool	Activity Rate
Machine setups	$	per setup
Special processing	$	per MH
General factory	$	per DLH

Requirement 2:

Determine the unit cost of each product according to the ABC system, including direct materials and direct labor.

	Hubs	Sprockets
Direct materials	$	$
Direct labor
Overhead
Unit cost	$	$

Reference no: EM13580831

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