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Crane Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: ( 1 ) a home fire extinguisher and ( 2 )

Crane 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 21/2 pounds of multipurpose 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 $1,577,308. Thus, the predetermined overhead rate is $16.38 or ($1,577,308+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.
Use of
Drivers by Product
Activity Cost Pools
Cost Drivers
Estimated Overhead
Estimated Use of
Receiving
Pounds
$83,750
Cost Drivers
335.000
Home
215.000
Commercial
120,000
Forming
Machine hours
152,950
Assembling
Number of parts
407,960
35.000
217,000
27,000
165.000
8,000
Testing
Painting
Number of tests
Gallons
54,060
25,500
15,500
52.000
10,000
57,838
5,258
3,680
1,578
Packing and shipping
Pounds
820,750
335,000
215,000
$1,577,308
120,000
Under traditional product costing, compute the total unit cost of each product. (Round answers to 2 decimal places, e.g.12.50.)
Home Model
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, eg.1,2.25 and cost assigned to 0 decimal places, e.g.2,500.)
Activity
Cost Pool
Receiving
Use of Drivers by Product
Home Model
Activity-Based
Overhead Rates
Cost Assigned
Use ol by P
Forming
Assembling
Testing
Painting
Packing and shipping
Total
COStS
assigned (a)
Units produced
(b)
Overhead cost per unit [(a)-
(b)]
e Textbook and MediaCommercial Model Compute the total cost per unit for each product under ABC. (Round answers to 2 decimal places, eg.12.25.)
Home Model
Commercial Model
Total cost per unit 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

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