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Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit 0.60 0.20 Annual Production 17,000 units 58,000 units Hubs Sprockets Additional information about the company follows: a. Hubs require $37 in direct materials per unit, and Sprockets require $11. b. The direct labor wage rate is $10 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 $ 18,630 $ 175,500 $ 195,800 Hubs 115 3,900 NA 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 92 e NA Total 207 3,900 NA

Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit 0.60 0.20 Annual Production 17,000 units 58,000 units Hubs Sprockets Additional information about the company follows: a. Hubs require $37 in direct materials per unit, and Sprockets require $11. b. The direct labor wage rate is $10 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 $ 18,630 $ 175,500 $ 195,800 Hubs 115 3,900 NA 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 92 e NA Total 207 3,900 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: Hubs Sprockets Direct Labor-Hours per Unit 0.60 0.20 Annual Production 17,000 units 58,000 units Additional information about the company follows: a. Hubs require $37 in direct materials per unit, and Sprockets require $11. b. The direct labor wage rate is $10 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 $ 18,630 $ 175,500 $ 195,800 Hubs 115 3,900 NA 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 92 B NA Total 207 3,900 NA
Transcribed Image Text:Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Hubs Sprockets Direct Labor-Hours per Unit 0.60 0.20 Annual Production 17,000 units 58,000 units Additional information about the company follows: a. Hubs require $37 in direct materials per unit, and Sprockets require $11. b. The direct labor wage rate is $10 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 $ 18,630 $ 175,500 $ 195,800 Hubs 115 3,900 NA 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 92 B NA Total 207 3,900 NA
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