Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow: Direct labor hours per Unit Annual

Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow:
Direct labor hours per Unit Annual Production
Hubs 0.80 Units 10000Units
Sprockets 0.40 Units 40000 Units
Additional information about the company follows:
a. Hubs require $32 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 processing.
d. The ABC system has the following activity cost pools
Cost Hubs Sprockets tot
Machine set up ( Number of set ups) $72000 100 300 400
Special processing ( Machine hours) $200000 5000 0 5000
General factory (Direct labor hours) $816000 8000 16000 24000
Required:
a. Compute the activity rate(i.e predetermined overhead state) for each activity cost pool.
b. Determine the unit cost of each product according to the ABC system.


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