Reference no: EM132639348

Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours per Annual Unit Production Hubs 0.60 17,000 units Sprockets 0.20 47,000 units

Additional information about the company follows:

a. Hubs require $29 in direct materials per unit, and Sprockets require $11.

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 Activity Overhead Activity   Cost Pool (Activity Measure)  Cost Hubs    Sprockets     Total

Machine setups (number of setups)             $ 19,800                             100                80              180

Special processing (machine-hours)            $ 195,000                            3,900              0            3,900

General factory (organization-sustaining)       $ 85,400                              NA                NA               NA

Required:

Question 1. Compute the activity rate for each activity cost pool.

Question 2. Determine the unit product cost of each product according to the ABC system.