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 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 $1,590,008. Thus, the predetermined overhead rate is $16.51 or ($1,590,008 +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 Pools Cost Drivers Estimated Overhead Home Commercial $90,450 335.000 215.000 120,000 8.000 155.050 35,000 27,000 Receiving Forming Assembling Testing Pounds Machine hours Number of parts Number of tests 412,300 217.000 165,000 52,000 46.920 25,500 15,500 10,000 Gallons 57,838 5,258 3,680 1,578 Painting Packing and shipping 827,450 335.000 215,000 Pounds 120,000 $1,590,008 Under traditional product costing.compute the total unit cost of each product. (Round answers to 2 decimal places, e3. 12.50) Home Model Commercial Model Total unit cost $ e Textbook and Media 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.) Activity Cost Pool Estimated Overhead Estimated Use of Cost Drivers Activity-Based Overhead Rate Receiving $ Pounds $ per poun Forming Machine hours $ per mach hour Assembling Parts $ per part Testing Tests $ pert Painting Gallons $ per gallos Packing and shipping Pounds $ . per poun 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, eg. 12.25 and cost assigned to decimal places, es 2,500) Activity Cost Pool Estimated Use of Drivers Home Model Activity-Based Overhead Rates Cost Assigned Estimate Driv Receiving $ $ 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, eg, 12.25.) Home Model Commercial Model Total cost per unit $ $ e Textbook and Media 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
