12 Fogerty Company makes two productstitanium Hubs and Sproc

12 Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow Labor- Hours nts Hubs 0.80 12,000 units 57,880 units Sprockets .40 Print Additional information about the company follows: a. Hubs require $27 in direct materials per unit, and Sprockets require $16. b. The direct labor wage rate is $11 per hour. c. Hubs are more complex to manufacture than Sprockets and they require special processing. d. The company\'s activity-based absorption costing system has the following activity cost pools: Estimated Activity Cost Pool (and Activity Measure) Machine setups (number of setups) Special processing (machine-hours) ota 145 116 261 $35,235 s 108,000 3,600 3,600 32,400 1 factory (Direct 648,000 9,60e 22,800 Required: 1. Co 2. Compute the unit product cost for Hubs and Sprockets uing activity-based absorption costing. te the activity rate for each activity cost pool. Prex 12 of 13 Next> to search

Solution

1 Activity cost pool Activity rate Machine setups 135 =35235/261 Special processing 30 =108000/3600 General factory 20 =648000/32400 2 Hubs Sprockets Machine setups 19575 15660 Special processing 108000 0 General factory 192000 456000 Total overhead 319575 471660 Units 12000 57000 Overhead per unit 26.63 8.27 Hubs Sprockets Direct materials 27 16 Direct labor 8.8 4.4 Overhead 26.63 8.27 Unir product cost 62.43 28.67