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)1. Estimated annual manufacturing overhead is $1,588,566. Thus, the predetermined overhead rate is $16.50 or ($1,588,566 + 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. IFTIN Estimated Use of Cost Drivers Commercial Home Estimated Overhead Cost Drivers Activity Cost Pools 215,000 120,000 335,000 $87,100 Receiving Pounds 8,000 35,000 27,000 155,050 Machine hours Forming 52,000 165,000 217,000 412,300 Number of parts Assembling 10,000 15,500 25,500 46,920 Number of tests Testing 1,578 3,680 5,258 63,096 Gallons Painting 120,000 215,000 335,000 824,100 Packing and shipping Pounds $1,588,566 X Your answer is incorrect. Try again. Under traditional product costing, compute the total unit cost of each product. (Round answers to 2 decimal places, e.g. 12.50.) Commercial Model Home Model 70.12 62.12 Total unit cost Your answer is incorrect. Try again. 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-Based Overhead Rate Estimated Estimated Activity Cost Pool Use of Cost Drivers Overhead per pound Pounds Receiving Machine hours per machine hour Forming Parts per part Assembling Testing Tests per test Painting per gallon Gallons Packing and shippling Pounds per pound Activity-Based Overhead Rates Estimated Use of Activity-Based Overhead Estimated Use of Drivers Activity Cost Pool Cost Assigned Cost Assigned Drivers Rates Receiving Forming Assembling Testing Painting Packing and shipping Total costs assigned (a) Units produced (b) Overhead cost per unit [(a)(b)] Your answer is incorrect. Try again. 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 Your answer is incorrect. Try again. 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
