Fogerty Company makes two products-titanlum Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours per Annual Unit Production 0.88 28,000 units e.40 58,00e units Hubs Sprockets Additional Information about the company follows:
Fogerty Company makes two products-titanlum Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours per Annual Unit Production 0.88 28,000 units e.40 58,00e units Hubs Sprockets Additional Information about the company follows:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Do not give image format
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
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.)
Hubs
Sprockets
Direct materials
Direct labor
Overhead
Unit cost
$ 0.00 $ 0.00
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
Additional Information about the company follows:
a. Hubs require $33 in direct materials per unit, and Sprockets require $13.
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:
Annual
Production
0.88 28,000 units
0.40 58,000 units
Activity Cost Pool (Activity Measure)
Machine setups (number of setups)
Required 1
Special processing (nachine-hours)
General factory (organization-sustaining)
Activity Cost Pool
Machine setups
Special processing
Required 2
Estimated
Overhead
Cost
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
$ 22,230
$236,500
$138,400
Complete this question by entering your answers in the tabs below.
Activity
Hubs Sprockets
95
4,300
NA
76
8
NA
Total
171
4,300
NA
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