Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Current Attempt in Progress Combat Fire, Inc manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2)

image text in transcribed
image text in transcribed
Current Attempt in Progress 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 $1,561,090. Thus, the predetermined overhead rate is $16.21 or ($1,561.090 + 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 company's 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 Activity Cost Pools Cost Drivers Estimated Overhead Cost Drivers Home Commercial Receiving Pounds $83,750 335,000 215,000 120,000 Forming Machine hours 149,100 35,000 27,000 8.000 Assembling Number of parts 403,620 217,000 165.000 52,000 Testing Number of tests 47,940 25,500 15.500 10.000 Painting Gallons 52.5.80 5.258 3,680 1.578 Packing and shipping Pounds 824,100 335,000 215,000 120,000 $1,561,090 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. e... 12.25 and cost assigned to O decimal places, es 2,500.) Home Model Activity-Based Overhead Rates Activity Cost Pool Estimated Use of Drivers Estimate Dri Cost Assigned Receiving $ Forming $ Assembling $ Testing $ Painting Packing and shipping Total costs assigned (a) Units produced (b) Overhead cost per unita) (bil eTextbook and Media

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Value Added Auditing CERM Academy Series On Enterprise Risk Management

Authors: Greg Hutchins

4th Edition

978-0965466554

More Books

Students also viewed these Accounting questions