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Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit 0.80 0.40 Hubs Sprockets Additional information about the company follows: a. Hubs require $32 in direct materials per unit, and Sprockets require $18. b. The direct labor wage rate is $15 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: Annual Production 10,000 units 40,000 units Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Required 1 Required 2 Complete this question by entering your answers in the tabs below. 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. Compute the activity rate for each activity cost pool. Activity Rate Activity Cost Pool Machine setups Special processing Estimated Overhead Cost $ 72,000 $ 200,000 $ 816,000 per setup per MH Hubs 100 5,000 ΝΑ Activity Sprockets 300 0 ΝΑ Total 400 5,000 ΝΑ

Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit 0.80 0.40 Hubs Sprockets Additional information about the company follows: a. Hubs require $32 in direct materials per unit, and Sprockets require $18. b. The direct labor wage rate is $15 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: Annual Production 10,000 units 40,000 units Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Required 1 Required 2 Complete this question by entering your answers in the tabs below. 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. Compute the activity rate for each activity cost pool. Activity Rate Activity Cost Pool Machine setups Special processing Estimated Overhead Cost $ 72,000 $ 200,000 $ 816,000 per setup per MH Hubs 100 5,000 ΝΑ Activity Sprockets 300 0 ΝΑ Total 400 5,000 ΝΑ

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 0.80 0.40 Hubs Sprockets Additional information about the company follows: a. Hubs require $32 in direct materials per unit, and Sprockets require $18. b. The direct labor wage rate is $15 per hour. Annual Production 10,000 units 40,000 units 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 Required 2 Complete this question by entering your answers in the tabs below. Estimated Overhead 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. Compute the activity rate for each activity cost pool. Activity Rate per setup per MH Activity Cost Pool Machine setups Special processing Cost $ 72,000 $ 200,000 $ 816,000 Hubs 100 5,000 ΝΑ Activity Sprockets 300 0 ΝΑ Total 400 5,000 ΝΑ
Transcribed Image Text:Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit 0.80 0.40 Hubs Sprockets Additional information about the company follows: a. Hubs require $32 in direct materials per unit, and Sprockets require $18. b. The direct labor wage rate is $15 per hour. Annual Production 10,000 units 40,000 units 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 Required 2 Complete this question by entering your answers in the tabs below. Estimated Overhead 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. Compute the activity rate for each activity cost pool. Activity Rate per setup per MH Activity Cost Pool Machine setups Special processing Cost $ 72,000 $ 200,000 $ 816,000 Hubs 100 5,000 ΝΑ Activity Sprockets 300 0 ΝΑ Total 400 5,000 ΝΑ
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 Hubs Sprockets
Transcribed Image Text: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 Hubs Sprockets
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