Question

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

	Direct Labor-Hours per Unit	Annual Production
Hubs	0.60	24,000 units
Sprockets	0.20	46,000 units

Additional information about the company follows:

a. Hubs require $28 in direct materials per unit, and Sprockets require $15.

b. The direct labor wage rate is $18 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		Expected Activity
Activity Cost Pool (and Activity Measure)	Overhead Cost		Hubs	Sprockets	Total
Machine setups (number of setups)	$	16,830	85	68	153
Special processing (machine-hours)	$	209,000	3,800	0	3,800
General factory (Direct labor-hours)	$	354,000	14,400	9,200	23,600

Required:

1. Compute the activity rate for each activity cost pool.

2. Compute the unit product cost for Hubs and Sprockets using activity-based absorption costing.

Compute the unit product cost for Hubs and Sprockets using activity-based absorption costing. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

	Hubs Sprockets Direct materials Direct labor Manufacturing overhead Unit product cost $0.00 $0.00

Answer 1

Answer is attached below