Question
Coronado Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a commercial fire extinguisher.
Coronado 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.
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 |
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 | $enter the total unit cost in dollars rounded to 2 decimal places | $enter the total unit cost in dollars rounded to 2 decimal places |
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