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. Thehome modelis a high-volume (54,000 units), half-gallon cylinder that holds 2 1/2 pounds of multi-purpose dry chemical at 480 PSI. Thecommercial modelis 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 $1,570,138. Thus, the predetermined overhead rate is $16.30or ($1,570,138 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

Activity Cost Pools

Cost Drivers

Estimated Overhead

Estimated Use of

Cost Drivers

Home

Commercial

ReceivingPounds$83,750

335,000

215,000

120,000

FormingMachine hours150,850

35,000

27,000

8,000

AssemblingNumber of parts403,620

217,000

165,000

52,000

TestingNumber of tests49,980

25,500

15,500

10,000

PaintingGallons57,838

5,258

3,680

1,578

Packing and shippingPounds824,100

335,000

215,000

120,000

$1,570,138

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

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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 poundFormingenter 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 hourAssemblingenter a dollar amount

enter a number of parts

Parts

$enter a dollar amount per part rounded to 2 decimal places

per partTestingenter a dollar amount

enter a number of tests

Tests

$enter a dollar amount per test rounded to 2 decimal places

per testPaintingenter a dollar amount

enter an amount of gallons

Gallons

$enter a dollar amount per gallon rounded to 2 decimal places

per gallonPacking and shippingenter 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

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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 0 decimal places, e.g. 2,500.)

Home Model

Commercial Model

Activity Cost Pool

EstimatedUse of

Drivers

Activity-Based

Overhead Rates

Cost Assigned

EstimatedUse 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

$enter a dollar amount rounded to 2 decimal places

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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$enter a dollar amount rounded to 2 decimal places

$enter a dollar amount rounded to 2 decimal places

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LINK TO VIDEO

Classify each of the activities as a value-added activity or a non-value-added activity.

Activity

Receiving select between value added and non-value added

Value-added

Non-value-added

Forming select between value added and non-value added

Non-value-added

Value-added

Assemblingselect between value added and non-value added

Non-value-added

Value-added

Testingselect between value added and non-value added

Non-value-added

Value-added

Painting select between value added and non-value added

Non-value-added

Value-added

Packing and shipping select between value added and non-value added

Non-value-added

Value-added