Fogerty company makes two products titanium hubs
Question # 00767795
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Updated on: 06/26/2020 06:06 AM Due on: 07/06/2020
Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow:
| Direct Labor-Hours per Unit |
Annual Production |
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| Hubs | 0.90 | 25,000 units |
| Sprockets | 0.50 | 49,000 units |
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| Additional information about the company follows: |
| a. | Hubs require $26 in direct materials per unit, and Sprockets require $17. |
| b. | The direct labor wage rate is $19 per hour. |
| c. | Hubs are more complex to manufacture than Sprockets and they require special processing. |
| d. | The ABC system has the following activity cost pools: |
| Estimated Overhead |
Activity | |||||||||
| Activity Cost Pool | Activity Measure | Cost | Hubs | Sprockets | Total | |||||
| Machine setups | Number of setups | $ | 17,100 | 95 | 76 | 171 | ||||
| Special processing | Machine-hours | $ | 132,000 | 4,400 | 0 | 4,400 | ||||
| General factory | Direct labor-hours | $ | 423,000 | 22,500 | 24,500 | 47,000 | ||||
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| Requirement 1: |
| Compute the activity rate for each activity cost pool. |
| Activity Cost Pool | Activity Rate | |
| Machine setups | $ | per setup |
| Special processing | $ | per MH |
| General factory | $ | per DLH |
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| Requirement 2: |
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Determine the unit cost of each product according to the ABC system, including direct materials and direct labor. |
| Hubs | Sprockets | |
| Direct materials | $ | $ |
| Direct labor | ||
| Overhead | ||
| Unit cost |
$ |
$ |
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Rating:
/5
