Question

Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor- Hours Annual Production 13,e00 units 47,000 units per Unit e.70 e.30 Hubs Sprockets Additional information about the company follows: a. Hubs require $29 in direct matelals per unit, and Sprockets require $16. b. The direct labor wage rate is $14 per hor. 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: Expected Activity Sprockets Estimated Overhead Cost %24 Total 243 Activity Cost Pool (and Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (Direct labor-hours) Hubs 24,300 $ 184, e00 $ 301,600 135 108 4,600 9,100 4,600 23,200 14,100

Answer 1

	(final asnwers are marked in yellow color.
	Calculation Of Activity Driver Rate Per Acctivity
	Activity	Total Overhead Cost	Expected Activities	Activity Driver rate
	Machine Setup	$                         24,300	243	$                             100	per set up
	Special Processing	$                      1,84,000	4600	$                               40	per MH
	General Factory	$                      3,01,600	23200	$                               13	per DLH
	Total Manufacturing Overhead Cost Allocated To Product Hubs
		Activity Rate	Number of activites	Overhead Cost
	Machine Setup	$                         100.00	135	$                       13,500
	Special Processing	$                            40.00	4600	$                   1,84,000
	General Factory	$                            13.00	9100	$                   1,18,300
	Total Manufacturing Overhead Cost			$                   3,15,800
	Total Manufacturing Overhead Cost Allocated To Sprockets
		Activity Rate	Number of activites	Overhead Cost
	Machine Setup	$                         100.00	108	$                       10,800
	Special Processing	$                            40.00	0	$                                -
	General Factory	$                            13.00	14100	$                   1,83,300
	Total Manufacturing Overhead Cost			$                   1,94,100
	Unit Product Cost
		Product Hub	Sprockets
	Direct Material	$                            29.00	$                              16.00
	Direct Labor	$                              9.80	$                                4.20
	Manufacturing Overhead	$                            24.29	$                                4.13
	Unit Product Cost	$                            63.09	$                              24.33
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