CH7 HW 6 Fogerty Company makes two products-ttanium Hubs and Sprockets. Data reg
ID: 2401981 • Letter: C
Question
CH7 HW 6 Fogerty Company makes two products-ttanium Hubs and Sprockets. Data regarding the two products follow. Labor- points 0.80 18,000 unite 0.40 s0,000 units Additional information about the company follows a. Hubs require $34 in direct materials per unit, and Sprockets require $11. b. The direct labor wage rate is $17 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: Eatimated Overhead s 25,740 130 $264,000 4,800 $274,400 NA 104 234 0 4,800 (number of setups) Special procesaing (nachine-houra) 1. Compute the activity rate for each activity cost pool. 2. Determine the unit product cost of each product according to the ABC system. Complete this question by entering your answers in the tabs below.Explanation / Answer
!) Activity rate Estimated Activity Rate Activity cost pool overhead A B C=a/b Machine setups 25,740 234 110 per setup Special processing 264,000 4,800 55 per machine hours 2) overhead allocated = rate *Activity hubs Activity cost pool Rate Activity total A B C=A*B Machine setups 110 130 14300 Special processing 55 4,800 264000 total overhead 278300 overhead cost per unit 278300/18000 15.46 Sprockets Activity cost pool Rate Activity total A B C=A*B Machine setups 110 104 11440 Special processing 55 0 0 total overhead 11440 overhead cost per unit 11440/50000 0.23 hubs Sprockets Direct materials 34 11 direct labor 13.6 6.8 overhead 15.46 0.23 unit cost 63.06 18.03