Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding t
ID: 2537811 • Letter: F
Question
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow Direct Labor- Hours per Annusl Unit Production 0.60 24,eeeunits Hubs Sprockets e.20 53,0eunits Additional information about the company follows: o. Hubs require $27 in direct materials per unit, and Sprockets require $17 b. The direct labor wage rate is $11 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 Activit Estimated Overhead Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) 25,515 135 s 220,000 4,000 General factory (organization-sustaining) $ 131,e0e NA CostHubs Sprockets Total 108 243 4,000 NA NAExplanation / Answer
Statement showing computations Particulars Amount a Activity Driver No of Activity b Cost per activity c= a/b No of Activity of Hubs d Cost Allocated to Hubs c*d No of Activity of Sprockets e Cost Allocated to Sprockets c*e Machine setups 25,515.00 Setups 243.00 105.00 135.00 14,175.00 108.00 11,340.00 Special processing 220,000.00 Machine hours 4,000.00 55.00 4,000.00 220,000.00 - - General factory 131,000.00 Organisation sustaining Total Overhead 376,515.00 234,175.00 11,340.00 No of units 24,000.00 53,000.00 Cost per unit 9.76 0.21 Paticulars Hubs Sprockets Direct Materials 27.00 17.00 Direct Labour 6.60 2.20 Overhead 9.76 0.21 Unit Cost 43.36 19.41