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Fogerty Company makes two products, Titanium Hubs and Sprockets. Data regarding the two products follow:
Additional information about the company follows: (i) Hubs require 32 in direct materials per unit, and Sprockets require 18 . (ii) The direct labor wage rate is 15 per hour. (iii) Hubs are more complex to manufacture than Sprockets and they require special equipment. (iv) The ABC system has the following activity cost pools:
(b) Determine the unit product cost of each product according to the ABC system.

Respuesta :

The unit product cost of each product according to the ABC system is $1.35

Machine setup = 72000/400

Hubs

Total overhead allocated. Hubs of

Machine setup

+ Hubs of special

$180 per setup

18000 +special processing

=200,000 /5000

$40 per MH

This answer is in tabular form therefore solution is attached which this answer in image form.

What is ABC system

Activity-based totally costing (ABC) is commonly used inside the production enterprise since it complements the reliability of cost data, hence producing nearly true costs and better classifying the costs incurred by using the company all through its production system.

activity-based costing (ABC) is a method of assigning overhead and indirect costs—such as salaries and utilities—to products and services.

  • The ABC system of value accounting is based totally on sports, which might be considered any event, unit of work, or task with a particular intention.
  • An activity is a cost driving force, together with buy orders or device setups.
  • The cost motive force fee, which is the fee pool overall divided by cost driver, is used to calculate the amount of overhead and indirect costs associated with a selected activity.

Learn more about ABC system https://brainly.com/question/15359581

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