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 $1,569,040. Thus, the predetermined overhead rate is $16.29 or ($1,569,040 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 Estimated Use of Cost Drivers Cost Drivers Home Commercial Activity Cost Pools Receiving Estimated Overhead $87,100 Pounds 335,000 215,000 120,000 148,050 35,000 27,000 Forming 8,000 52,000 Machine hours Number of parts Number of tests 217,000 165,000 Assembling 407,960 25,500 45.900 15,500 10,000 Testing 5,258 52,580 3,680 1,578 Gallons Painting 827,450 335,000 215,000 120,000 Packing and shipping Pounds $1.569,040 Under traditional product costing compute the total unit cost of each product. (Round answers to 2 decimal places, es. 12.50) Commercial Model Home Model $ Total unit cost $ e Textbook 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, eg. 12.25.) Activity Cost Pool Estimated Overhead Estimated Use of Cost Drivers Activity-Based Overhead Rate Receiving $ Pounds per pound Forming Machine hours $ per machine hour Assembling Parts $ per part Testing Tests $ per test Painting Gallons $ per gallon Packing and shipping Pounds per pound $ e Textbook and Media Home Model Activity Cost Pool Estimated Use of Drivers Activity-Based Overhead Rates Cost Assigned Estimated Use Drivers Receiving $ Forming $ Assembling $ Testing $1 $ Painting $ $ $ Packing and shipping Total costs assigned (a) $ Units produced (b) $ Overhead cost per unit [(a) + (6) e Textbook 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 $ $ e Textbook and Media Classify each of the activities as a value-added activity or a non-value-added activity. Activity Receiving > Forming