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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow:
| Direct Labor-Hours per Unit |
Annual Production |
|
| Hubs | 0.90 | 25,000 units |
| Sprockets | 0.50 | 49,000 units |
| Additional information about the company follows: |
| a. | Hubs require $26 in direct materials per unit, and Sprockets require $17. |
| b. | The direct labor wage rate is $19 per hour. |
| c. | Hubs are more complex to manufacture than Sprockets and they require special processing. |
| d. | The ABC system has the following activity cost pools: |
| Estimated Overhead |
Activity | |||||||||
| Activity Cost Pool | Activity Measure | Cost | Hubs | Sprockets | Total | |||||
| Machine setups | Number of setups | $ | 17,100 | 95 | 76 | 171 | ||||
| Special processing | Machine-hours | $ | 132,000 | 4,400 | 0 | 4,400 | ||||
| General factory | Direct labor-hours | $ | 423,000 | 22,500 | 24,500 | 47,000 | ||||
| Requirement 1: |
| Compute the activity rate for each activity cost pool. (Omit the "$" sign in your response.) |
| Activity Cost Pool | Activity Rate | |
| Machine setups | $ | per setup |
| Special processing | $ | per MH |
| General factory | $ | per DLH |
| Requirement 2: |
|
Determine the unit cost of each product according to the ABC system, including direct materials and direct labor. (Round your answers to 2 decimal places. Omit the "$" sign in your response.) |
| Hubs | Sprockets | |
| Direct materials | $ | $ |
| Direct labor | ||
| Overhead | ||
| Unit cost |
$ |
$ |
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