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Fogerty Company makes two productstitanium Hubs and Sprockets. Data regarding the two products follow: ...

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Accounting

Fogerty Company makes two productstitanium Hubs and Sprockets. Data regarding the two products follow:

Direct Labor-Hours per Unit Annual Production
Hubs 0.70 25,000 units
Sprockets 0.30 48,000 units

Additional information about the company follows:

Hubs require $36 in direct materials per unit, and Sprockets require $14.

The direct labor wage rate is $17 per hour.

Hubs require special equipment and are more complex to manufacture than Sprockets.

The ABC system has the following activity cost pools:

Activity Cost Pool (Activity Measure) Estimated Overhead Cost Activity
Hubs Sprockets Total
Machine setups (number of setups) $ 33,930 145 116 261
Special processing (machine-hours) $ 126,000 3,600 0 3,600
General factory (organization-sustaining) $ 175,900 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.

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