Fogerty Company makes to products, titanium Hubs and Sprockets. Data regarding the
Two products follow:



Direct
Annual
Labor- Hours
Production
Per Unit

Hubs 0.80
10,000 units
Sprockets 0.40 40,000
Units


Additional information about the company follows:

A. Hubs require $32.00 in direct materials per unit, and Sprockets require $18
B. The direct labor wage rate is $15 per hour
C. Hubs are more complex to manufacture than Sprockets and they require special
Equipment
D. The ABC system has the following activity cost pools:

Activity Cost Pool Activity measure Estimated
Activity

Overhead Cost Total Hubs Sprockets


Machine setups Number of setups $72, 000
400 100 300
Special Processing machine Hours $200,000
5,000 5,000 --------
General Factory Direct Labor hours $816,000
24,000 8,000 16,000

Required:

1) Compute the activity rate for each activity cost pool
2) Determine the unit cost of each product according to the ABC system. Including
Direct materials and direct labor