Current Attempt in Progress Sheffield, 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 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 $ 1,581,136. Thus, the predetermined overhead rate is $ 16.42 or ($ 1,581,136 = 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 Cost Drivers Activity Cost Pools Cost Drivers Estimated Overhead Home Commercial Receiving Pounds $ 87,100 335.000 215,000 120,000 Forming Machine hours 154,000 35,000 27,000 8,000 Assembling Number of parts 407,960 217,000 165,000 52,000 Testing Number of tests 44,880 25,500 15.500 10,000 Painting Gallons 63,096 5.258 3,680 1.578 Packing and shipping Pounds 824.100 335,000 215,000 120,000 $1,581,136 (a) Your answer is correct. 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 $ 62.13 $ 70.13 Attempts: 4 of 15 used (b) Your answer is correct. 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 Cost Pool Estimated Overhead Estimated Use of Cost Drivers Activity-Based Overhead Rate Receiving $ 87100 335000 Pounds $ 0.26 per pound Forming 154000 35000 Machine hours $ 4.40 per machine hour Assembling 407960 217000 Parts $ 1.88 per part Testing 44880 25500 Tests $ 1.76 per test Painting 63096 5258 Gallons $ 12 per gallon Packing and 824100 335000 Pounds $ 2.46 per pound shipping $ 1581136 e Textbook and Media Attempts: 1 of 15 used (c) 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.g. 12.25 and cost assigned to 0 decimal places, e.g. 2,500.) Home Model Activity Cost Pool Estimated Use of Drivers Activity-Based Overhead Rates Estimated Use Drivers Cost Assigned Receiving $ $ Forming $ Assembling $ Testing $ Painting $ Packing and shipping $ Total costs assigned (a) $ Units produced (b) Overhead cost per unit [(a) = (b)] $ e Textbook and Media Save for Later Attempts: 0 of 15 used Submit
