QUESTION 2Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow:Direct Labor-Hours per Unit Annual Production0.8013,00051,000HubsSprockets 0.40Additional information about the company follows:unitsunits1. Hubs require $28 in direct materials per unit, and Sprockets require $12.2. The direct labor wage rate is $12 per hour.3. Hubs require special equipment and are more complex to manufacture than Sprockets.4. The ABC system has the following activity cost pools:Activity Cost Pool (Activity Measure)Machine setups (number of setups)Special processing (machine-hours)General factory (organization-sustaining)Estimated Overhead Cost$ 33,930$ 264,000$ 398,000Required:1. Compute the activity rate for each activity cost pool.2. Determine the unit product cost of each product according to the ABC system.For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac).BIUSParagraphArial10pt111<!!!ActivityHubs Sprockets145 1164,800 0ΝΑNA>ען<Total2614,800ΝΑI.g

Lets understand the basics. Acitivity rate is calculated to allocate the overhead cost to actual…

Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production 0.80 13,000 units 51,000 units Hubs Sprockets 0.40 Additional information about the company follows: 1. Hubs require $28 in direct materials per unit, and Sprockets require $12. 2. The direct labor wage rate is $12 per hour. 3. Hubs require special equipment and are more complex to manufacture than Sprockets. 4. The ABC system has the following activity cost pools:

Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production 0.80 13,000 units 51,000 units Hubs Sprockets 0.40 Additional information about the company follows: 1. Hubs require $28 in direct materials per unit, and Sprockets require $12. 2. The direct labor wage rate is $12 per hour. 3. Hubs require special equipment and are more complex to manufacture than Sprockets. 4. The ABC system has the following activity cost pools:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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