EXERCISE 7-13 Computing ABC Product Costs LO7-3, LO7-4 Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Hubs Sprockets Direct Labor Hours per Unit 0.80 0.40 Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization sustaining) Annual Production Additional information about the company follows: a. Hubs require $32 in direct materials per unit, and Sprockets require $18. b. The direct labor wage rate is $15 per hour. 10,000 units 40,000 units c. Hubs require special equipment and are more complex to manufacture than Sprockets. d. The ABC system has the following activity cost pools: Estimated Overhead Cost Activity Hubs Sprockets $72,000 100 300 $200,000 5,000 $816,000 NA 0 ΝΑ Total 400 5,000 NA Required: 1. Compute the activity rate for each activity cost pool. Did you compute an activity rate for all of the activity cost pools? Why? 2. Determine the unit product cost of each product according to the ABC system.

EXERCISE 7-13 Computing ABC Product Costs LO7-3, LO7-4 Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Hubs Sprockets Direct Labor Hours per Unit 0.80 0.40 Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization sustaining) Annual Production Additional information about the company follows: a. Hubs require $32 in direct materials per unit, and Sprockets require $18. b. The direct labor wage rate is $15 per hour. 10,000 units 40,000 units c. Hubs require special equipment and are more complex to manufacture than Sprockets. d. The ABC system has the following activity cost pools: Estimated Overhead Cost Activity Hubs Sprockets $72,000 100 300 $200,000 5,000 $816,000 NA 0 ΝΑ Total 400 5,000 NA Required: 1. Compute the activity rate for each activity cost pool. Did you compute an activity rate for all of the activity cost pools? Why? 2. Determine the unit product cost of each product according to the ABC system.

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Description: Please do not give solution in image format thanku EXERCISE 7-13 Computing ABC Product Costs LO7-3, L07-4Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the twoproducts follow:HubsSprockets.Activity Cast Pool (Activity

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter18: Activity-Based Costing

Section: Chapter Questions

Problem 3ADM: Production run size and activity improvement Littlejohn, Inc. manufactures machined parts for the...

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