Combat Fire, 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-gallon cylinder that holds 2 1/2 pounds of multi-purpase dry chemical at 480 PSI. The commercial model is a low-volume (10,200 units), two-gallon cylinder that holds 10 pounds of multi-purpose dry chemical at 390 PSI. Both products require 1.5 hours of direct labor for completion. Therefore, total annual direct labor hours are 96,300 or [1.5 hours x (54,000 + 10,200)] Estimated annual manufacturing overhead is $1,568,390. Thus, the predetermined overhead rate is $16.29 or ($1,568,390 96,300) per direct labor hour. The direct materials cost per unit is $18.50 for the home model and $26.50 for the commercial model. The direct labor cost is $19 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 Use of Drivers by Product Estimated Use of Cost Drivers Activity Cost PoolsCost Drivers Receiving Forming Assembling Testing Painting Packing and shipping Estimated Overhead Home Commercial 120,000 8,000 52,000 10,000 1,578 120,000 Pounds Machine hours Number of parts Number of tests Gallons Pounds $87,100 152,950 410,130 44,880 52,580 820,750 $1,568,390 335,000 215,000 35,000 27,000 217,000 165,000 25,500 15,500 3,680 335,000 215,000 5,258 Under traditional product costing, compute the total unit cost of each product. (Round answers to 2 decimal places, e.g. 12.50.) Home Model Commercial Model Total unit cost LINK TO TEXT LINK TO TEXT LINK TO TEXT VIDEO: SIMILAR PROBLEM Under ABC, prepare a schedule showing the computations of the activity-based overhead rates (per cost driver). (Round overhead rate to 2 decimal places, e.g. 12.25.) Estimated Overhead Estimated Use of Cost Drivers Activity-Based Overhead Rate ivity Cost Pool Pounds Machine hours Parts Receiving Forming Assembling Testing Painting Packing and shipping per pound per machine hour per part Tests per test Gallons per gallorn Pounds per pound Prepare a schedule assigning each activity's overhead cost pool to each product based on the use of cost drivers. (Round overhead cost per unit to 2 decimal places, e.g. 12 assigned to O decimal places, e.g. 2,500.) Home Model Commercial Model Estimated Use of Activity-Based Estimated Use of Activity-Based Activity Cost Pool Drivers Overhead Rates Cost Assigned Drivers Overhead Rates Cost Assigned Receivingg Forming Assembling Testing Painting Packing and shipping Total costs assigned (a) Units produced (b) Overhead cost per unit [(a) (b)] Compute the total cost per unit for each product under ABC. (Round answer to 2 decimal places, e.g. 12.25.) Home Model Commercial Model Total cost per units LINK TO TEXT LINK TO TEXT LINK TO TEXT VIDEO: SIMILAR PROBLEM Classify each of the activities as a value-added activity or a non-value-added activity. Activity Receiving Forming Assembling Testing Painting Packing and shipping
