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Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours per Unit Annual Production 0.70 14,000 units 0.30 59,000 units Additional information about the company follows: Hubs Sprockets a. Hubs require $31 in direct materials per unit, and Sprockets require $14. 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) Estimated Overhead Cost $ 32,760 $123,000 $ 98,300 Activity Hubs Sprockets Total: 140 4,100 252 4,100 NA 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. 112 0 NA

Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours per Unit Annual Production 0.70 14,000 units 0.30 59,000 units Additional information about the company follows: Hubs Sprockets a. Hubs require $31 in direct materials per unit, and Sprockets require $14. 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) Estimated Overhead Cost $ 32,760 $123,000 $ 98,300 Activity Hubs Sprockets Total: 140 4,100 252 4,100 NA 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. 112 0 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 Annual Production 0.70 14,000 units 0.30 59,000 units Additional information about the company follows: a. Hubs require $31 in direct materials per unit, and Sprockets require $14. 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) Estimated Overhead Cost $ 32,760 $123,000 $ 98,300 Activity Hubs Sprockets Total 140 252 4,100 NA 4,100 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. 112 0 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 Annual Production 0.70 14,000 units 0.30 59,000 units Additional information about the company follows: a. Hubs require $31 in direct materials per unit, and Sprockets require $14. 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) Estimated Overhead Cost $ 32,760 $123,000 $ 98,300 Activity Hubs Sprockets Total 140 252 4,100 NA 4,100 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. 112 0 NA
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