Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Hubs Sprockets Unit 0.70 0.30 Annual Production 18,000 units 51,000 units Additional Information about the company follows: a. Hubs require $29 in direct materials per unit, and Sprockets require $18. 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) Required: 1. Compute the activity rate for each activity cost pool. Estimated Overhead Activity Cost Hubs $ 22,680 105 Sprockets 84 Total 189 $ 120,000 $ 211,500 4,800 0 NA NA 4,800 NA 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 Compute the activity rate for each activity cost pool. Activity Cost Pool Machine setups Special processing Activity Rate per setup per MH
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Hubs Sprockets Unit 0.70 0.30 Annual Production 18,000 units 51,000 units Additional Information about the company follows: a. Hubs require $29 in direct materials per unit, and Sprockets require $18. 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) Required: 1. Compute the activity rate for each activity cost pool. Estimated Overhead Activity Cost Hubs $ 22,680 105 Sprockets 84 Total 189 $ 120,000 $ 211,500 4,800 0 NA NA 4,800 NA 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 Compute the activity rate for each activity cost pool. Activity Cost Pool Machine setups Special processing Activity Rate per setup per MH
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ashvin
Transcribed Image Text:Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow:
Direct Labor-Hours per
Hubs
Sprockets
Unit
0.70
0.30
Annual Production
18,000 units
51,000 units
Additional Information about the company follows:
a. Hubs require $29 in direct materials per unit, and Sprockets require $18.
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)
Required:
1. Compute the activity rate for each activity cost pool.
Estimated Overhead
Activity
Cost
$ 22,680
Hubs
105
Sprockets
84
Total
189
4,800
0
ΝΑ
ΝΑ
4,800
ΝΑ
$ 120,000
$ 211,500
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
Compute the activity rate for each activity cost pool.
Activity Cost Pool
Machine setups
Special processing
Activity Rate
per setup
per MH
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