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Problem 5-35A FireOut, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a commercial fire extinguisher. The home model is a high-volume (54,000 units), half-litre cylinder that holds 2.50 kilograms of multi- purpose dry chemical at 480 PSI (pounds per square inch). The commercial model is a low-volume (10,200 units), two-litre cylinder that holds 10 kilograms of multi-purpose dry chemical at 390 PSI. Both products require 1.50 hours of direct labour for completion. Therefore, total annual direct labour hours are 96,300 or [1.50 hrs. x (54,000 10,200)]. Expected annual manufacturing overhead is $1,502,280. Thus, the predetermined overhead rate is $15.60 or ($1,502,280 96,300) per direct labour hour. The direct materials cost per unit is $18.86 for the home model and $26.76 for the commercial model. The direct labour cost is $18.00 per unit for both the home and the commercial models. The company's managers identified six activity cost pools and related cost drivers, and accumulated overhead by cost pool as follows Estimated Expected Use Overhead Expected Use Activity Cost Pools Cost Drivers of Cost Drivers Receiving Forming Assembling Testing Painting Packing and shipping Kilograms Machine hours Number of parts Number of tests Litres Kilograms $70,380 150,900 392,800 52,700 53,840 781,660 $1,502,280 338,100 216,000 35,200 27,000 219,400 167,000 26,500 16,100 5,920 3,920 338,100 216,000 of Drivers by Product Home Commercial 122,100 8,200 52,400 10,400 2,000 122,100