Business, 16.04.2020 21:29 esdancer5403

Exercise 7-13 Computing ABC Product Costs [LO7-3, LO7-4] 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 18,000 units Sprockets 0.20 44,000 units Additional information about the company follows: Hubs require $28 in direct materials per unit, and Sprockets require $13. The direct labor wage rate is $20 per hour. Hubs require special equipment and are more complex to manufacture than Sprockets. 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) $ 16,065 85 68 153 Special processing (machine-hours) $ 74,000 3,700 0 3,700 General factory (organization-sustaining) $ 90,000 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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Exercise 7-13 Computing ABC Product Costs [LO7-3, LO7-4] Fogerty Company makes two products—titanium...