Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production 27,000 units 41,000 units Hubs Sprockets Additional information about the company follows: 0.90 0.50 a. Hubs require $37 in direct materials per unit, and Sprockets require $12. b. The direct labor wage rate is $19 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) Estimated Overhead Cost $ 35,100 $ 144,000 $ 352,300 Hubs 150 3,600 ΝΑ 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. Activity Sprockets 120 8 NA Total 270 3,600 NA

Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production 27,000 units 41,000 units Hubs Sprockets Additional information about the company follows: 0.90 0.50 a. Hubs require $37 in direct materials per unit, and Sprockets require $12. b. The direct labor wage rate is $19 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) Estimated Overhead Cost $ 35,100 $ 144,000 $ 352,300 Hubs 150 3,600 ΝΑ 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. Activity Sprockets 120 8 NA Total 270 3,600 NA

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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