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 $1,585,316. Thus, the predetermined overhead rate is $16.46 or ($1,585,316 +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 Cost Drivers Estimated Overhead Home 215,000 $90,450 Activity Cost Pools Receiving Forming Assembling Testing Painting Packing and shipping Pounds Machine hours Number of parts Number of tests 150,850 401,450 52,020 335,000 35,000 217,000 25,500 27,000 165,000 Commercial 120,000 8,000 52,000 10,000 1,578 120,000 15,500 3,680 Gallons 63,096 827,450 5,258 335,000 Pounds 215,000 $1,585,316 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 $ $ eTextbook 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, e.g. 12.25.) Activity Cost Pool Estimated Overhead Estimated Use of Cost Drivers Activity-Based Overhead Rate Receiving pe $ Pounds $ pou pe Forming Machine hours $ ma hou Assembling pe Parts $ par Testing Tests $ pe Painting Gallons $ pe gal pe Packing and shipping Pounds $ pot e Textbook and Media Activity Cost Pool Estimated Use of Drivers Home Model Activity-Based Overhead Rates Cost Assigned Receiving $ $ Forming $ Assembling $ Testing $ Painting $ $ $ Packing and shipping Total costs assigned (a) Units produced (b) Overhead cost per unit [(a) : (b)] $ e Textbook and Media Commercial Model Estimated Use of Drivers Activity-Based Overhead Rates Cost Assigned $ $ $ $ $ ta $ $ $ 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 $ eTextbook 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 e Textbook and Media
