MBA 515 Fogerty Company makes two products—titanium Hubs and Sprockets. Data regarding the two products follow:DirectLabor-Hours per Unit AnnualProductionHubs 0.70 16000 unitsSprockets 0.30 51000 unitsAdditional information about the company follows:1. Hubs require $31 in direct materials per unit, and Sprockets require $13.2. The direct labor wage rate is $17 per hour.3. Hubs require special equipment and are more complex to manufacture than Sprockets.4. The ABC system has the following activity cost pools:Estimated ActivityActivity Cost Pool (Activity Measure) Overhead Cost Hubs Sprockets TotalMachine setups (number of setups) $28,710 145 116 261Special processing (machine-hours) $136,500 3,900 0 3,900General factory (organization-sustaining) $194,800 N/A NA NA1. Compute the activity rate for each activity cost pool.2. Determine the unit product cost of each product according to the ABC system.Requirement 1.Compute the activity rate for each activity cost pool.Activity Cost Pool Activity Rate Machine setups $ Per setupSpecial processing $ Per MH Requirement 2.Determine the unit product cost of each product according to the ABC System. (Do not round intermediate calculations. Round your answer to 2 decimal places).Direct Materials Hubs SprocketsDirect Labor Overhead Unit Cost 0.00 0.00

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Chapter1: Financial Statements And Business Decisions
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MBA 515

Fogerty Company makes two products—titanium Hubs and Sprockets. Data regarding the two products follow:
Direct
Labor-Hours per Unit Annual
Production
Hubs 0.70 16000 units
Sprockets 0.30 51000 units


Additional information about the company follows:
1. Hubs require $31 in direct materials per unit, and Sprockets require $13.
2. The direct labor wage rate is $17 per hour.
3. Hubs require special equipment and are more complex to manufacture than Sprockets.
4. The ABC system has the following activity cost pools:

Estimated Activity
Activity Cost Pool (Activity Measure) Overhead Cost Hubs Sprockets Total
Machine setups (number of setups) $28,710 145 116 261
Special processing (machine-hours) $136,500 3,900 0 3,900
General factory (organization-sustaining) $194,800 N/A NA NA

1. Compute the activity rate for each activity cost pool.
2. Determine the unit product cost of each product according to the ABC system.
Requirement 1.
Compute the activity rate for each activity cost pool.
Activity Cost Pool Activity Rate
Machine setups $ Per setup
Special processing $ Per MH

Requirement 2.
Determine the unit product cost of each product according to the ABC System. (Do not round intermediate calculations. Round your answer to 2 decimal places).
Direct Materials Hubs Sprockets
Direct Labor
Overhead
Unit Cost 0.00 0.00

 

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