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Home / Questions / Fogerty Company makes two products—titanium Hubs and Sprockets. Data regarding the two pro...

Fogerty Company makes two products—titanium Hubs and Sprockets. Data regarding the two products follow:

Fogerty Company makes two products—titanium Hubs and Sprockets. Data regarding the two products follow:

 

  Direct
Labor-Hours per Unit
Annual
Production
Hubs 0.70 11,000 units
Sprockets 0.30 45,000 units
 

 

Additional information about the company follows:

 

  1. Hubs require $25 in direct materials per unit, and Sprockets require $19.

  2. The direct labor wage rate is $15 per hour.

  3. Hubs require special equipment and are more complex to manufacture than Sprockets.

  4. The ABC system has the following activity cost pools:

 

  Estimated Activity
Activity Cost Pool (Activity Measure) Overhead Cost Hubs Sprockets Total
Machine setups (number of setups) $ 16,200 100 80 180
Special processing (machine-hours) $ 188,000 4,700 0 4,700
General factory (organization-sustaining) $ 196,700 NA NA NA
 

 Determine the unit product cost of each product according to the ABC system.

                                 HUBS                               SPROCKETS

Direct Materials         ??                                           ??

Direct Labor                ??                                          ??

Overhead                   ??                                           ??

 

 

Sep 01 2020 View more View Less

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