Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production 0.80 13,000 units 51,000 units Hubs Sprockets 0.40 Additional information about the company follows: 1. Hubs require $28 in direct materials per unit, and Sprockets require $12. 2. The direct labor wage rate is $12 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:

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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QUESTION 2
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow:
Direct Labor-Hours per Unit Annual Production
0.80
13,000
51,000
Hubs
Sprockets 0.40
Additional information about the company follows:
units
units
1. Hubs require $28 in direct materials per unit, and Sprockets require $12.
2. The direct labor wage rate is $12 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:
Activity Cost Pool (Activity Measure)
Machine setups (number of setups)
Special processing (machine-hours)
General factory (organization-sustaining)
Estimated Overhead Cost
$ 33,930
$ 264,000
$ 398,000
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.
For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac).
BIUS
Paragraph
Arial
10pt
111
<
!!!
Activity
Hubs Sprockets
145 116
4,800 0
ΝΑ
NA
>
ען
<
Total
261
4,800
ΝΑ
I.
g
Transcribed Image Text:QUESTION 2 Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production 0.80 13,000 51,000 Hubs Sprockets 0.40 Additional information about the company follows: units units 1. Hubs require $28 in direct materials per unit, and Sprockets require $12. 2. The direct labor wage rate is $12 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: Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Estimated Overhead Cost $ 33,930 $ 264,000 $ 398,000 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. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph Arial 10pt 111 < !!! Activity Hubs Sprockets 145 116 4,800 0 ΝΑ NA > ען < Total 261 4,800 ΝΑ I. g
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