Please help Fogerty Company makes two products, titanium Hubs and Sprockets. Dat
ID: 2460333 • Letter: P
Question
Please help Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow Labor- Hours perAnnual Unit Prod 0.50 12,000 units 0.10 57,000 units Hubs Sprockets Additional information about the company follows a. Hubs require $36 in direct materials per unit, and Sprockets require $17 b. The direct labor wage rate is $12 per hour c. Hubs are more complex to manufacture than Sprockets and they require special equipment d. The ABC system has the following activity cost pools Estimated Overhead Cost HubsSprockets Total Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) 120 96 216 S 24 840 $ 92.0004.600 04,600 s 40.200 NA Required: 1. Compute the activity rate for each activity cost pool Activity Cost Pool Machine setupss Snecial processing $ Activity Rate 115 per setup 20 per MHExplanation / Answer
ANSWER 1
Activity rate for Machine setup => 24840 /216 => 115 per setup
Activity rate for Special processing => 92000 /4600 => 20 per MH.
Answer 2
QUESTION 2
ANSWER 1
Activity rate for Machine setup => 25200 /180 => 140 per setup
Activity rate for Special processing => 96000 /4800 => 20 per MH.
Answer 2
PARTICULARS HUBS SPROCKETS DIRECT MATERIAL 36 17 DIRECT LABOUR 6 1.2 OVERHEAD 135 115 TOTAL UNIT COST $ 177 $ 133.2