Exercise 7-13 (Algo) Computing ABC Product Costs [LO7-3, LO7-4] Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours Hubs Sprockets per Unit 0.50 0.10 Annual Production 28,000 units 60,000 units Additional information about the company follows: a. Hubs require $23 in direct materials per unit, and Sprockets require $12. b. The direct labor wage rate is $14 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: Estimated Overhead Activity Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) Cost $ 25,200 Hubs Sprockets Total 140 112 252 $ 171,500 4,900 0 $ 122,000 NA NA 4,900 NA General factory (organization-sustaining) 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. Required 1 Required 2 Determine the unit product cost of each product according to the ABC system. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Hubs Sprockets Direct materials Direct labor Overhead Unit cost $ 0.00 $ 0.00
Exercise 7-13 (Algo) Computing ABC Product Costs [LO7-3, LO7-4] Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours Hubs Sprockets per Unit 0.50 0.10 Annual Production 28,000 units 60,000 units Additional information about the company follows: a. Hubs require $23 in direct materials per unit, and Sprockets require $12. b. The direct labor wage rate is $14 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: Estimated Overhead Activity Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) Cost $ 25,200 Hubs Sprockets Total 140 112 252 $ 171,500 4,900 0 $ 122,000 NA NA 4,900 NA General factory (organization-sustaining) 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. Required 1 Required 2 Determine the unit product cost of each product according to the ABC system. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Hubs Sprockets Direct materials Direct labor Overhead Unit cost $ 0.00 $ 0.00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Exercise 7-13 (Algo) Computing ABC Product Costs [LO7-3, LO7-4]
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow:
Direct Labor-Hours
Hubs
Sprockets
per Unit
0.50
0.10
Annual Production
28,000 units
60,000 units
Additional information about the company follows:
a. Hubs require $23 in direct materials per unit, and Sprockets require $12.
b. The direct labor wage rate is $14 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:
Estimated Overhead
Activity
Activity Cost Pool (Activity Measure)
Machine setups (number of setups)
Special processing (machine-hours)
Cost
$ 25,200
Hubs
Sprockets
Total
140
112
252
$ 171,500
4,900
0
$ 122,000
NA
NA
4,900
NA
General factory (organization-sustaining)
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.
Required 1
Required 2
Determine the unit product cost of each product according to the ABC system. (Do not round intermediate calculations. Round
your answers to 2 decimal places.)
Direct materials
Direct labor
Overhead
Unit cost
$
GA
Hubs
MAINA
Sprockets
0.00 $
0.00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F00e62c2d-8aaa-40ea-83b0-eb0019187de3%2Fcbffa2a4-9a52-41a0-8dd9-963d4a205a84%2Fgued9ps_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 7-13 (Algo) Computing ABC Product Costs [LO7-3, LO7-4]
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow:
Direct Labor-Hours
Hubs
Sprockets
per Unit
0.50
0.10
Annual Production
28,000 units
60,000 units
Additional information about the company follows:
a. Hubs require $23 in direct materials per unit, and Sprockets require $12.
b. The direct labor wage rate is $14 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:
Estimated Overhead
Activity
Activity Cost Pool (Activity Measure)
Machine setups (number of setups)
Special processing (machine-hours)
Cost
$ 25,200
Hubs
Sprockets
Total
140
112
252
$ 171,500
4,900
0
$ 122,000
NA
NA
4,900
NA
General factory (organization-sustaining)
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.
Required 1
Required 2
Determine the unit product cost of each product according to the ABC system. (Do not round intermediate calculations. Round
your answers to 2 decimal places.)
Direct materials
Direct labor
Overhead
Unit cost
$
GA
Hubs
MAINA
Sprockets
0.00 $
0.00
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education