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 (54,000 + 10,200), Expected annual manufacturing overhead is $1,567,400. Thus, the predetermined overhead rate is $16.28 or ($1,567,400 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: Expected Use of Drivers by Product Expected Use of Cost Drivers Activity Cost Pools Receiving Forming Assembling Testing Painting Cost Drivers Estimated Overhead $85,500 153,000 410,000 45,000 53,900 820,000 $1,567,400 Home Commercial Pounds 335,000 215,000 35,000 27,000 217,000 165,000 25,500 15,500 3,680 335,000 215,000 120,000 8,000 52,000 10,000 1,578 120,000 Machine hours Number of parts Number of tests Gallons 5,258 Packing and shippingPounds Your answer is incorrect. Try again. Under traditional product costing, compute the total unit cost of each product. (Round answers to 2 decimal places, e.g. 12.25.) Home Model Commercial Model Total unit cost 61.91 61.91 Under ABC, prepare a schedule showing the computations of the activity-based overhead rates (per cost drive). (Round overhead rate to 2 decimal places, e.g. 12.25.,) Activity Cost Pool Receiving Estimated Overhead Expected Use of Cost Drivers Activity-Based Overhead Rate 8550 335000 Pounds 0.26 per pound Forming 15300 35000 Machine hours 4.37 per machine hour Assembling 217000 Parts 1.89 per part 1.76 per test 10.25 per gallon 41000 Testing 45000 25500 Tests Painting 5390 5258 Gallons Packing and shipping 82000 335000 Pounds 2.45 per pound 156740 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. 12.25 and cost assigned to o decimal places, e.g. 2,500.) Home Model al Model Expected Use of Drivers Activity-Based Activity Cost Pool Overhead Rates Cost Assigned Exected Use of Activity-Based overhead Rates Cost Assigned -Drivers Receiving 0.26 215000 54873 0.26 120000 3062 Forming 4.37 27000 118029 4.37 34971 Assembling 1.89 165000 311751 1.89 52000 98249 Testing 1.76 15500 27353 1.76 10000 17647 Painting 10.25 3680 37724 10.25 1578 16176 Packing and shipping 2.45 215000 526269 2.45 120000 293731 Total costs assigned (a) Units produced (b) Overhead cost per unit [(a)(b)l 1075998 491402 1020 19.93 48.18 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 unit 57.43 93.68
