Question

PLEASE HELP WITH BOTH SECTIONS: Exercise 2A-1 Activity-Based Absorption Costing [LO2-5] Fogerty Company makes two products—titanium Hubs and Sprockets. Data regarding the two products follow:

Additional information about the company follows:

a. Hubs require $23 in direct materials per unit, and Sprockets require $14.

b. The direct labor wage rate is $13 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:

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.

Check my wo 16 Exercise 2A-1 Activity-Based Absorption Costing (LO2-5] Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: 0.7 points Direct Labor- Hours per Unit 0.80 0.40 eBook Hubs Sprockets Annual Production 10,000 units 53,000 units Print References Additional information about the company follows: a. Hubs require $23 in direct materials per unit, and Sprockets require $14. b. The direct labor wage rate is $13 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: Expected Activity Activity Cost Pool (and Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (Direct labor-hours) Estimated Overhead Cost $ 20,700 $ 225,000 $ 321,200 Hubs 100 5,000 8,000 Sprockets 80 0 21,200 Total 180 5,000 29, 200

Answer 1

A forgetry company make two pwoducts company makes tw Req. Il compute the activity Rate: Activity cost Pool Perse machine setup BIS pes setup 2) special processing 45 pesmi 3) General factory A Il pesDLH ($203003 1803 [225000 5000 [3,21200 - 29, 200] Re9.2 compute unit product cost: Sprockets Hubs Direct material 23 Direct labore $ 10.4 manufacturing overheads 32-45 I unit product cost $65.85 5.2 4 -57 $ 23.77 Hubs Activity cost Pool machine setup special processing General factory ТО Гcu Rate (a) $ 115 45 I! Activity (6) 1100 5000 8000 S ABC cost raxo). 11500 2,25000 88000 324500 Sprockets (b) (9) IS 80 caxb) 15 9200 45 machine - Setup special processing General factory Тогсч 21200 2332.00 $242 yoo

Hub Sprockets $ 14 23 +0.4 5.2 Direct materials Direct labor $ 13 Per LH X 0.80 $ 13 Per LH X 0.40 loveshead $ 324500 = 10,000 units $ 242400- 53000 units unit cost 32.45 4.57 $23.77 65-85