Hubs Sprockets per Unit 0.90 0.50 Annual Production 10,000 units 51,000 units Additional information about the company follows: a. Hubs require $26 in direct materials per unit, and Sprockets require $17. 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 Overhead Activity Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) Cost $ 14,535 Hubs Sprockets Total 85 68 153 $ 110,000 4,400 0 4,400 General factory (organization-sustaining) $ 315,000 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.
Hubs Sprockets per Unit 0.90 0.50 Annual Production 10,000 units 51,000 units Additional information about the company follows: a. Hubs require $26 in direct materials per unit, and Sprockets require $17. 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 Overhead Activity Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) Cost $ 14,535 Hubs Sprockets Total 85 68 153 $ 110,000 4,400 0 4,400 General factory (organization-sustaining) $ 315,000 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
h6
Transcribed Image Text:Hubs
Sprockets
per Unit
Annual Production
10,000 units
51,000 units
0.90
0.50
Additional information about the company follows:
a. Hubs require $26 in direct materials per unit, and Sprockets require $17.
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 Overhead
Activity Cost Pool (Activity Measure)
Machine setups (number of setups)
Special processing (machine-hours)
Cost
$ 14,535
Hubs
85
Activity
Sprockets
68
Total
153
$ 110,000
4,400
。
0
$ 315,000
NA
NA
4,400
NA
General factory (organization-sustaining)
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.
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.)
Direct materials
Direct labor
Overhead
Unit cost
69
Hubs
Sprockets
0.00
$
0.00
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