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Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Hubs Sprockets 0.70 0.30 Annual Production 17,000 units 45,000 units Additional information about the company follows: a. Hubs require $29 in direct materials per unit, and Sprockets require $19. b. The direct labor wage rate is $11 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: Estimated Overhead Cost $ 14,400 $ 168,000 $ 187,400 Hubs 80 4,200 NA Activity Sprockets 64 NA Total 144 4,200 NA

Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Hubs Sprockets 0.70 0.30 Annual Production 17,000 units 45,000 units Additional information about the company follows: a. Hubs require $29 in direct materials per unit, and Sprockets require $19. b. The direct labor wage rate is $11 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: Estimated Overhead Cost $ 14,400 $ 168,000 $ 187,400 Hubs 80 4,200 NA Activity Sprockets 64 NA Total 144 4,200 NA

FINANCIAL ACCOUNTING
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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Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Hubs Sprockets. 0.70 0.30 Annual Production 17,000 units 45,000 units Additional information about the company follows: a. Hubs require $29 in direct materials per unit, and Sprockets require $19. b. The direct labor wage rate is $11 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 Cost $ 14,400 $ 168,000 $ 187,400 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. 2. Determine the unit product cost of each product according to the ABC system. Hubs 80 4,200 NA Activity Sprockets 64 0 NA Total 144 4,200 NA
Transcribed Image Text:Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Hubs Sprockets. 0.70 0.30 Annual Production 17,000 units 45,000 units Additional information about the company follows: a. Hubs require $29 in direct materials per unit, and Sprockets require $19. b. The direct labor wage rate is $11 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 Cost $ 14,400 $ 168,000 $ 187,400 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. 2. Determine the unit product cost of each product according to the ABC system. Hubs 80 4,200 NA Activity Sprockets 64 0 NA Total 144 4,200 NA
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