.. 3·1.. 5741.Computing ABC Product CostsFogerty Company makes two products, titanium. Hubs and Sprockets. Data regarding the twoproducts follow:DirectLabor-HoursAnnualper Unit0.70ProductionHubs20,000 units40,000 unitsSprockets0.30Additional information about the company follows:a. Hubs require $29 in direct materials per unit, and Sprockets require $12.b.The direct labor wage rate is $10 per hour.c. Hubs are more complex to manufacture than Sprockets and they require special equipment.d. The ABC system has the following activity cost pools:ActivityEstimatedSprockets207Activity Cost Pool (Activity Measure)Machine setups (number of setups)Special processing (machine-hours)General factory (organization-sustaining)Overhead CostTotal27,945236,50074,000Hubs1154,300NA920 4,300NANA2424Required:1. Compute the activity rate for each activity cost pool.2. Determine the unit product cost of each product according to the ABC system.O Focus ParagraphStylesEditingVoi27.2.Comparing Traditional and Activity-Based Product MarginsSmoky Mountain Corporation makes two types of hiking boots-Xtreme and the Pathfinder. Dataconcerning these two product lines appear below:Pathfinder$ 87.00$ 55.00$10.00XtremeSelling price per unitDirect materials per unitDirect labor per unitDirect labor-hours per unitEstimated annual production and sales$120.00$ 63.60$ 12.001.2 DLHS25,000 units1.0 DLHS72,000 unitsThe company has a traditional costing system in which manufacturing overhead is applied tounits based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below:$2,040,000Estimated total manufacturing overheadEstimated total direct labor-hours102,000 DLHSRequired:1. Compute the product margins for the Xtreme and the Pathfinder products under theDFocuste

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Description: .. 3·1.. 5741.Computing ABC Product CostsFogerty Company makes two products, titanium. Hubs and Sprockets. Data regarding the twoproducts follow:DirectLabor-HoursAnnualper Unit0.70ProductionHubs20,000 units40,000 unitsSprockets0.30Additional informa

Activity Cost (A) No. of Activities (B) Activity Rate C = AB Machine Setup $27,945 207 $27945207 =…

Business

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2...I ..3 6 1.Computing ABC Product Costs Fogerty Company makes two products, titanium.Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit 0.70 Annual Production Hubs 20,000 units Sprockets 0.30 40,000 units Additional information about the company follows: a. Hubs require $29 in direct materials per unit, and Sprockets require $12. b.The direct labor wage rate is $10 per hour. c. Hubs are more complex to manufacture than Sprockets and they require special equipment.

2...I ..3 6 1.Computing ABC Product Costs Fogerty Company makes two products, titanium.Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit 0.70 Annual Production Hubs 20,000 units Sprockets 0.30 40,000 units Additional information about the company follows: a. Hubs require $29 in direct materials per unit, and Sprockets require $12. b.The direct labor wage rate is $10 per hour. c. Hubs are more complex to manufacture than Sprockets and they require special equipment.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...

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