8. Fogerty Company makes two
products, titanium Hubs and Sprockets. Data regarding the two products follow:
Additional information about
the company follows:
Hubs require $32 in direct materials per unit, and Sprockets require $18.
The direct labor wage rate is $15 per hour.
Hubs are more complex to manufacture than Sprockets and they require special
d. The ABC system has the
following activity cost pools:
a. Compute the activity rate
for each activity cost pool. Did you compute an activity rate for all of the
activity cost pools? Why?
b. Determine the unit product
cost of each product according to the ABC system.