2 Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding

Question

2 Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow Annual Unit Produc look Sprackets.5e 48,00 n Hubs eBock Additional information about the company follows a. Hubs require $32 in direct materials per unit, and Sprockets require $11 b. The direct labor wage rate is $17 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 Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Hubs Sprockets Total 193,58 4,3ee 357,688 8 4,388 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 Complete this question by entering your answers in the tabs below

Explanation / Answer

Req 1: STATEMENT SHOWING ACTIVITY RATE OF ACTIVITY POOL Activity Total Expected Activity ACTIVITY COST POOL Measures Overheads Activity Rate Machine Setups Setups 23,400 180 130 per setup Special processing MH 193,500 4,300 45 per MH Req 2: Overheads assigned: HUBS SPROCKETS Activity Rate Activity Amount Activity Amount machine Setup $130 100 13000 80 10400 Special processing $45 4300 193500 0 0 Total Overheads 206500 10400 Divide: Number of units 15000 48000 Unit OH cost 13.767 0.217 UNIT COST HUBS SPROCKETS material 32 11 labour 13.6 6.8 Oh 13.767 0.217 Total unit cost 59.367 18.017

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