Homework SourseFogerty Company makes two productstitanium Hubs and Sprocket
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours per Unit Production 0.80 30,000 units 0.40 55,000 units Annual Hubs Sprockets Additional information about the company follows: a. Hubs require $31 in direct materials per unit, and Sprockets require $13 b. The direct labor wage rate is $13 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: Estimated Activit Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Overhead 28,710 $464,000 Cost Hubs Sprockets Total 261 116 145 $117,500 4,700 NA 0 4,700 NA NA 
Solution
1) Activity Cost pool Activity rate Machine setups $ 110 per setup special Processing $ 25 per MH Working: Activity Cost pool Estimated Overhead costs Total Activity Activity rate Machine setups $ 28,710 261 $ 110 per setup special Processing $ 1,17,500 4700 $ 25 per MH 2) Hubs Sprockets Direct Materials $ 31.00 $ 13.00 Direct Labor $ 10.40 $ 5.20 Overhead $ 4.45 $ 0.23 Unit cost $ 45.85 $ 18.43 Working: a. Hubs Sprockets Direct Labor hours per unit 0.80 0.40 Direct Labor wages rate $ 13 $ 13 Direct Labor costs $ 10.40 $ 5.20 b. Overhead assignment Hubs Sprockets Activity rate Number of activity Overhead assigned Number of activity Overhead assigned Machine setups $ 110 145 $ 15,950 116 $ 12,760 special processing $ 25 4700 $ 1,17,500 $ 1,33,450 $ 12,760 c. Hubs Sprockets Total Overhead costs $ 1,33,450 $ 12,760 Total Production in units 30,000 55,000 Overhead costs per unit $ 4.45 $ 0.23