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 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 PS 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)). Estimates annual manufacturing overhead is $1,574,800. Thus, the predetermined overhead rate is $16.35 or ($1,574,800 96,300) per direct labor hour. TI 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 Activity Cost Pools Cost Drivers Estimated Overhead Commercial Receiving Pounds $87,100 Forming Machine hours 151,900 405,790 Estimated Use of Cost Drivers Home 335,000 215,000 35,000 27.000 217.000 165,000 25,500 15,500 5,258 3,680 335,000 215,000 120,000 8,000 52,000 10,000 Assembling Number of parts Testing Number of tests 49,980 Gallons Painting 52,580 1,578 120,000 Packing and shipping Pounds 827.450 $1,574,800 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 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 PS 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)). Estimates annual manufacturing overhead is $1,574,800. Thus, the predetermined overhead rate is $16.35 or ($1,574,800 96,300) per direct labor hour. TI 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 Activity Cost Pools Cost Drivers Estimated Overhead Commercial Receiving Pounds $87,100 Forming Machine hours 151,900 405,790 Estimated Use of Cost Drivers Home 335,000 215,000 35,000 27.000 217.000 165,000 25,500 15,500 5,258 3,680 335,000 215,000 120,000 8,000 52,000 10,000 Assembling Number of parts Testing Number of tests 49,980 Gallons Painting 52,580 1,578 120,000 Packing and shipping Pounds 827.450 $1,574,800
