Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding t

Question

Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours per Unit 0.80 0.40 Annual Production Hubs Sprockets 21,000 units 49,000 units Additional information about the company follows a. Hubs require $26 in direct materials per unit, and Sprockets require $13 b. The direct labor wage rate is $12 per hour c. Hubs are more complex to manufacture than Sprockets and they require special processing d. The company's activity-based absorption costing system has the following activity cost pools Expected Activit Estimated Overhead Activity Cost Pool (and Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (Direct labor-hours) Cost Hubs Sprockets Total $ 18,000 80 64 198,000 400,400 16,800 4,400 36,400 4,400 19,600 Required 1. Compute the activity rate for each activity cost pool 2. Compute the unit product cost for Hubs and Sprockets using activity-based absorption costing Complete this question by entering your answers in the tabs below

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Solution 2:

Determination of activity rate for each activity & allocation of overhead to products and overhead cost per unit Activity Estimated Overhead Cost Activity Base Usage of Activity Base Activity Rate Hubs Sprockets Usage Allocated Costs Usage Allocated Costs Machine Setups $18,000.00 Nos of setups 144 $125.00 80 $10,000.00 64 $8,000.00 Special processing $198,000.00 Machine hours 4400 $45.00 4400 $198,000.00 0 $0.00 General factory $400,400.00 Direct labor hours 36400 $11.00 16800 $184,800.00 19600 $215,600.00 Total $616,400.00 $392,800.00 $223,600.00 Nos of units 21000 49000 Overhead cost per unit $18.70 $4.56

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