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 $1,566,090. Thus, the predetermined overhead rate is $16.26 or ($1,566,090 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
Activity Cost Pools		Cost Drivers		Estimated Overhead		Estimated Use of Cost Drivers		Home		Commercial
Receiving		Pounds		$83,750		335,000		215,000		120,000
Forming		Machine hours		151,900		35,000		27,000		8,000
Assembling		Number of parts		401,450		217,000		165,000		52,000
Testing		Number of tests		48,960		25,500		15,500		10,000
Painting		Gallons		52,580		5,258		3,680		1,578
Packing and shipping		Pounds		827,450		335,000		215,000		120,000
				$1,566,090

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						$enter a dollar amount rounded to 2 decimal places

eTextbook and Media

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

eTextbook and Media

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

Activity
Receiving		select between value added and non-value added Value-addedNon-value-added
Forming		select between value added and non-value added Value-addedNon-value-added
Assembling		select between value added and non-value added Non-value-addedValue-added
Testing		select between value added and non-value added Value-addedNon-value-added
Painting		select between value added and non-value added Value-addedNon-value-added
Packing and shipping		select between value added and non-value added Value-addedNon-value-added