Reference no: EM131777709

Problem - Compute A B C costs. Haggerty company makes two types or products. They are wheels and sprockets.

Wheels: .80Direct Labor Hours Per Unit 10,000 annual production.

Sprockets: .40 Direct Labor Hours per unit. 40,000 annual productions.

Additional information:

a. Wheels require 32$ in direct materials per unit, Sprockets requires 18$.

b. The direct labor wage rate is 15$ per hour

c. Wheels are more complex to manufacture than sprockets and the require special equipment.

d. The ABC system has the following activity pools:

			Activity
Activity Cost Pool	Activity Measure	Est overhead Cost	Wheels	Sprockets	Total
Machine Setups	Number of setups	72000	100	300	400
Special Processing	Machine Hours	200000	5000	0	5000
General Factory	Direct Labor Hours	816000	8000	16000	24000

Required -

Compute the activity rate for each activity cost pool.

Determine the unit product cost of each product according to the A B C system.