Question
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.
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)]. Estimated annual manufacturing overhead is $1,581,136. Thus, the predetermined overhead rate is $16.42 or ($1,581,136 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 companys managers identified six activity cost pools and related cost drivers and accumulated overhead by cost pool as follows.
Estimated Use of Drivers by Product | ||||||||||
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Activity Cost Pools | Cost Drivers | Estimated Overhead | Estimated Use of Cost Drivers | Home | Commercial | |||||
Receiving | Pounds | $87,100 | 335,000 | 215,000 | 120,000 | |||||
Forming | Machine hours | 154,000 | 35,000 | 27,000 | 8,000 | |||||
Assembling | Number of parts | 407,960 | 217,000 | 165,000 | 52,000 | |||||
Testing | Number of tests | 44,880 | 25,500 | 15,500 | 10,000 | |||||
Painting | Gallons | 63,096 | 5,258 | 3,680 | 1,578 | |||||
Packing and shipping | Pounds | 824,100 | 335,000 | 215,000 | 120,000 | |||||
$1,581,136 |
Incorrect answer iconYour answer is incorrect.
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 | $enter a dollar amount rounded to 2 decimal places | $enter a dollar amount rounded to 2 decimal places |
eTextbook and Media
Incorrect answer iconYour answer is incorrect.
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.)
Activity Cost Pool | Estimated Overhead | Estimated Use of Cost Drivers | Activity-Based Overhead Rate | ||||||
---|---|---|---|---|---|---|---|---|---|
Receiving | $enter a dollar amount | enter an amount of pounds | Pounds | $enter a dollar amount per pound rounded to 2 decimal places | per pound | ||||
Forming | enter a dollar amount | enter a number of machine hours | Machine hours | $enter a dollar amount per machine hour rounded to 2 decimal places | per machine hour | ||||
Assembling | enter a dollar amount | enter a number of parts | Parts | $enter a dollar amount per part rounded to 2 decimal places | per part | ||||
Testing | enter a dollar amount | enter a number of tests | Tests | $enter a dollar amount per test rounded to 2 decimal places | per test | ||||
Painting | enter a dollar amount | enter an amount of gallons | Gallons | $enter a dollar amount per gallon rounded to 2 decimal places | per gallon | ||||
Packing and shipping | enter a dollar amount | enter an amount of pounds | Pounds | $enter a dollar amount per pound rounded to 2 decimal places | per pound | ||||
$enter a total amount |
eTextbook and Media
Incorrect answer iconYour answer is incorrect.
Prepare a schedule assigning each activitys 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 0 decimal places, e.g. 2,500.)
Home Model | Commercial Model | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Activity Cost Pool | Estimated Use of Drivers | Activity-Based Overhead Rates | Cost Assigned | Estimated Use of Drivers | Activity-Based Overhead Rates | Cost Assigned | ||||||
Receiving | enter a number of cost drivers used per activity | $enter a dollar amount rounded to 2 decimal places | $enter a dollar amount rounded to 0 decimal places | enter a number of cost drivers used per activity | $enter a dollar amount rounded to 2 decimal places | $enter a dollar amount rounded to 0 decimal places | ||||||
Forming | enter a number of cost drivers used per activity | $enter a dollar amount rounded to 2 decimal places | enter a dollar amount rounded to 0 decimal places | enter a number of cost drivers used per activity | $enter a dollar amount rounded to 2 decimal places | enter a dollar amount rounded to 0 decimal places | ||||||
Assembling | enter a number of cost drivers used per activity | $enter a dollar amount rounded to 2 decimal places | enter a dollar amount rounded to 0 decimal places | enter a number of cost drivers used per activity | $enter a dollar amount rounded to 2 decimal places | enter a dollar amount rounded to 0 decimal places | ||||||
Testing | enter a number of cost drivers used per activity | $enter a dollar amount rounded to 2 decimal places | enter a dollar amount rounded to 0 decimal places | enter a number of cost drivers used per activity | $enter a dollar amount rounded to 2 decimal places | enter a dollar amount rounded to 0 decimal places | ||||||
Painting | enter a number of cost drivers used per activity | $enter a dollar amount rounded to 2 decimal places | enter a dollar amount rounded to 0 decimal places | enter a number of cost drivers used per activity | $enter a dollar amount rounded to 2 decimal places | enter a dollar amount rounded to 0 decimal places | ||||||
Packing and shipping | enter a number of cost drivers used per activity | $enter a dollar amount rounded to 2 decimal places | enter a dollar amount rounded to 0 decimal places | enter a number of cost drivers used per activity | $enter a dollar amount rounded to 2 decimal places | enter a dollar amount rounded to 0 decimal places | ||||||
Total costs assigned (a) | $enter a total amount | $enter a total amount | ||||||||||
Units produced (b) | enter a number of units produced | enter a number of units produced | ||||||||||
Overhead cost per unit [(a) (b)] | $enter a dollar amount rounded to 2 decimal places
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