Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Hubs Sprockets Additional information about the company follows: a. Hubs require $36 in direct materials per unit, and Sprockets require $10. b. The direct labor wage rate is $13 per hour. 0.80 0.40 Annual Production 20,000 units 50,000 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: 1. Compute the activity rate for each activity cost pool. 2. Determine the unit product cost of each product according to the ABC system. Required 2 Complete this question by entering your answers in the tabs below. Compute the activity rate for each activity cost pool. Activity Cost Pool Machine setups Special processing Estimated Overhead Cost $ 20,655 $ 154,000 $ 216,000 Activity Rate per setup per MH < Required 1 Required 2 > Hubs 85 4,400 ΝΑ Activity Sprockets 68 0 ΝΑ Total 153 4,400 ΝΑ

Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Hubs Sprockets Additional information about the company follows: a. Hubs require $36 in direct materials per unit, and Sprockets require $10. b. The direct labor wage rate is $13 per hour. 0.80 0.40 Annual Production 20,000 units 50,000 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: 1. Compute the activity rate for each activity cost pool. 2. Determine the unit product cost of each product according to the ABC system. Required 2 Complete this question by entering your answers in the tabs below. Compute the activity rate for each activity cost pool. Activity Cost Pool Machine setups Special processing Estimated Overhead Cost $ 20,655 $ 154,000 $ 216,000 Activity Rate per setup per MH < Required 1 Required 2 > Hubs 85 4,400 ΝΑ Activity Sprockets 68 0 ΝΑ Total 153 4,400 ΝΑ

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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