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-purpose dry chemical at 480 PSL. 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 $1,588,566. Thus, the predetermined overhead rate is $16.50 or ($1,588,56696,300) 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 Activity Cost Pools Cost Drivers Commercial Estimated Overhead $87,100 Pounds Receiving 120,000 Forming 8,000 Machine hours 155,050 Estimated Use of Cost Drivers Home 335,000 215,000 35,000 27.000 217,000 165,000 25.500 15.500 5.258 3,680 335,000 215,000 412.300 Number of parts Assembling 52.000 10.000 46.920 Number of tests Testing 63,096 1.578 Painting Gallons 824,100 120,000 Packing and shipping Pounds $1,588,566 L y me - S ale Impacts o Home Model Commercial Model Total unit cost $ 62.25 70.25 e Textbook and Media Assistance Used - Your answer is partially correct. Under ABC, prepare a schedule showing the computations of the activity based overhead rates (per cost driver) (Round overhead rate to 2 decimal places, eg. 12.25) Estimated Overhead Activity Cost Pool Activity-Based Overhead Rate Estimated Use of Cost Drivers 335000 per pound Pounds 87100 Receiving 155050 35000 Machine hours $ per machine hour Forming per part 412200 217000 Parts Assembling 212000 Tests $ per test 46920 Testing 25500 63096 Gallons per gallon Painting per pound Pounds 824100 Packing and shipping 1586566 X Your answer is incorrect. 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, e3. 12.25 and cost assigned to 0 decimal places, eg. 2,500) Home Model Commercial Mo Activity Cost Pool Estimated Use of Drivers Activity-Based Overhead Rates Estimated Use of Drivers Activity-Based Overhead Rate Cost Assigned Receiving Forming Assembling Testing Painting Packing and shipping Total costs assigned (a) Units produced (6) Overhead
