Answer Happy

Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours per Annual Production Unit Hubs. Sprockets 0.80 15,000 units 0.40 54,000 units Additional information about the company follows: a. Hubs require $35 in direct materials per unit, and Sprockets require $10. b. The direct labor wage rate is $20 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: Activity Estimated Overhead. Cost Activity Cost Pool (Activity Measure) Hubs Sprockets Total Machine setups (number of setups) $ 16,560 80 64 144 Special processing (machine-hours) $288,000 4,800 4,800 NA General factory (organization-sustaining) $206,400 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.