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Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours Annual per Unit Production Hubs 0.70 19,000 units 0.30 49,000 units Sprockets Additional information about the company follows: a. Hubs require $26 in direct materials per unit, and Sprockets require $11. b. The direct labor wage rate is $18 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 Activity Overhead Activity Cost Pool (Activity Measure) Machine setups (number of setups) Cost Hubs Sprockets Total $ 27,405 145 116 261 Special processing (machine-hours) General factory (organization-sustaining) $154,000 4,400 4,400 $189,700 NA NA NA Required: 1. Compute the activity rate for each activity cost pool. 2. Determine the unit product cost of each product according to the ABC system.

Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours Annual per Unit Production Hubs 0.70 19,000 units 0.30 49,000 units Sprockets Additional information about the company follows: a. Hubs require $26 in direct materials per unit, and Sprockets require $11. b. The direct labor wage rate is $18 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 Activity Overhead Activity Cost Pool (Activity Measure) Machine setups (number of setups) Cost Hubs Sprockets Total $ 27,405 145 116 261 Special processing (machine-hours) General factory (organization-sustaining) $154,000 4,400 4,400 $189,700 NA NA NA Required: 1. Compute the activity rate for each activity cost pool. 2. Determine the unit product cost of each product according to the ABC system.

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 6PA: Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin...
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Compute the activity rate for each activity cost pool.

 
 
Activity Cost Pool Activity Rate
Machine setups   per setup
Special processing   per MH
Required: 1. Compute the activity rate for each activity cost pool. 2. Determine the unit product cost of each product according to the ABC system. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the unit product cost of each product according to the ABC system. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Hubs Sprockets Direct materials Direct labor Overhead Unit cost < Required 1 Required 2 >
Transcribed Image Text:Required: 1. Compute the activity rate for each activity cost pool. 2. Determine the unit product cost of each product according to the ABC system. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the unit product cost of each product according to the ABC system. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Hubs Sprockets Direct materials Direct labor Overhead Unit cost < Required 1 Required 2 >
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours Annual per Unit Production 0.70 19,000 units 49,000 units Hubs Sprockets 0.30 Additional information about the company follows: a. Hubs require $26 in direct materials per unit, and Sprockets require $11. b. The direct labor wage rate is $18 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 Activity Overhead Activity Cost Pool (Activity Measure) Machine setups (number of setups) Cost Hubs Sprockets Total $ 27,405 145 116 261 Special processing (machine-hours) General factory (organization-sustaining) $154,000 4,400 4,400 $189,700 NA NA NA Required: 1. Compute the activity rate for each activity cost pool. 2. Determine the unit product cost of each product according to the ABC system.
Transcribed Image Text:Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours Annual per Unit Production 0.70 19,000 units 49,000 units Hubs Sprockets 0.30 Additional information about the company follows: a. Hubs require $26 in direct materials per unit, and Sprockets require $11. b. The direct labor wage rate is $18 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 Activity Overhead Activity Cost Pool (Activity Measure) Machine setups (number of setups) Cost Hubs Sprockets Total $ 27,405 145 116 261 Special processing (machine-hours) General factory (organization-sustaining) $154,000 4,400 4,400 $189,700 NA NA NA Required: 1. Compute the activity rate for each activity cost pool. 2. Determine the unit product cost of each product according to the ABC system.
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