Exercise 7-13 computing abc product costs [lo7-3, lo7-4] fogerty company makes two products—titanium hubs and sprockets. data regarding the two products follow: direct labor-hours per unit annual production hubs 0.70 14,000 units sprockets 0.30 46,000 units additional information about the company follows: hubs require $20 in direct materials per unit, and sprockets require $18. the direct labor wage rate is $14 per hour. hubs require special equipment and are more complex to manufacture than sprockets. the abc system has the following activity cost pools: estimated activity activity cost pool (activity measure) overhead cost hubs sprockets total machine setups (number of setups) $ 14,850 75 60 135 special processing (machine-hours) $ 126,000 4,200 0 4,200 general factory (organization-sustaining) $ 134,000 na na na

required:

1. compute the activity rate for each activity cost pool.
2. determine the unit product cost of each product according to the abc system.