Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours Annual per Unit Production Hubs 0.70 19,000 units 0.30 49,000 units Sprockets Additional information about the company follows: a. Hubs require $26 in direct materials per unit, and Sprockets require $11. b. The direct labor wage rate is $18 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 Activity Overhead Activity Cost Pool (Activity Measure) Machine setups (number of setups) Cost Hubs Sprockets Total $ 27,405 145 116 261 Special processing (machine-hours) General factory (organization-sustaining) $154,000 4,400 4,400 $189,700 NA 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.

Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours Annual per Unit Production Hubs 0.70 19,000 units 0.30 49,000 units Sprockets Additional information about the company follows: a. Hubs require $26 in direct materials per unit, and Sprockets require $11. b. The direct labor wage rate is $18 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 Activity Overhead Activity Cost Pool (Activity Measure) Machine setups (number of setups) Cost Hubs Sprockets Total $ 27,405 145 116 261 Special processing (machine-hours) General factory (organization-sustaining) $154,000 4,400 4,400 $189,700 NA 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.

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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