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 Activity Cost Pools Cost Drivers Estimated Overhead Home Commercial Receiving Pounds $90,450 335,000 215,000 120,000 Forming Machine hours 155,050 35,000 27,000 8,000 Assembling Number of parts 412,300 217,000 165,000 52,000 Testing Number of tests 46,920 10,000 Painting Gallons 57,838 25,500 15,500 5,258 3,680 335,000 215,000 1,578 Packing and shipping Pounds 827,450 120,000 $1,590,008 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 $ 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 $ Pounds $ per pound Forming Machines hours per machine hour per Assembling Parts part Testing Tests per test Painting Gallons $ per gallon Packing and shipping Pounds $ per pound 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 Activity Cost Pool Estimated Use of Drivers Activity-Based Overhead Rates Estimated Use Drivers Cost Assigned | 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, e.g. 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
