Excel AutoSave OD R File Home Insert E xcelTemplateAssignment Cho4 (5) Formulas Data Review View Search DYMO Label QuickBooks Page Layout Help 12 A1 . 1 X f PA-1A Assign overhead using traditional costing and ABC, compute unit costs, classify activities as value or non-value-ad 4. A B C D E F HI L 1 P4.1A Asign overhead using traditional costing and ABC: compute unit costs classily activities as value or non-value-added 2 Combat Fire, Inc, manufactures steel cylinders and nozzles for two models of fire extinguishers. (1) a home fire extinguisher 3 and (2) a commercial fire extinguisher. The home model is a high-volume (64,000 units), hall.gallon cylinder that holds 2 1/2 4 pounds of multi-purpose dry chemical at 480 PSI. The commercial model is a low-volume (10,200 units), two-gallon cylinder 5 that holds 10 pounds of multi-purpose dry chemical at 390 PSI. Both products require 1.5 hours of direct labor for completion 6 Therefore, total annual direct labor hours are 96,300 or (1.5 hours x (54,000 + 10,200). Expected annual manufacturing 7 overhead is $1,584,280. Thus, the predetermined overhead rate is $16.45 or ($1,584,280 -96,300) per direct labor hour. 8 The direct materials cost per unit is $18.50 for the home model and $26.50 for the commercial model. The direct labor cost 9 is $19 per unit for both the home and the commercial models. 10 The company's managers Identified six activity cost pools and related cost drivers and accumulated overhead by cost pool 11 as follows Estimated Expected Use of Estimated Use of Cost Drivers by Product 14 Activity Cost Pools Cost Drivers Overhead Drivers Home Commercial 15 Receiving Pounds $80.400 335.000 215.000 120,000 16 Forming Machine hours 150,500 35,000 27,000 8,000 17 Assembling Number of parts 412,300 217,000 165,000 52,000 18 Testing Number of tests 51,000 25,500 15,500 10,000 19 Painting Gallons 52,580 5,258 3,680 1,678 20 Packing and shipping Pounds 637,500 335,000 215,000 120,000 51,684,280 22 23 Instructions 24 (0) Under traditional product costing compute the total unit cost of each product Prepare a simple comparative 25 schedule of the Individual costs by product (smlar toitlustration 4-3 on page 8). 26() Under ABO, prepare a schedule showing the computations of the activity-based overhead rates (per cost driver 27 (c) Prepare a schedule ossigning each activitys overhead cost pool to each product based on the use of cost drivers. 20 (include a computation of overhead cost per unit, rounding to the nearest cent.) 29(d) Compute the total cost per unit for each product under ABO. (O) Classily each of the activites as a value-added activity or a non-value-added activity 310) Comment on (1) the comparative overhead cost per unit for the two products under ABO and (2) the comparative total costs per unit under vaditional costing and ABO. 32 34 NOTE: Enter a number in cells requesting a value; onter either a number or a formula in cells with a "?". 64- 14449 P4.1 P4-2A COULO ch 38 (a) Home Model Commercial Model Manufacturing Costs Direct materials Direct labor Overhead Toisi unit cost 45 Estimated Expected Use of Activity-Based 46 (6) Pounds MH Activity Cost Pool Racalving Forming Asting Touring Painting Packing and shipping Parts Tests Ons Pounds C one al Mode A by Cost Pool Receiving Forming Assembling Testing Painting Packing and shing Total cost signed ) 3339353SRE Unt produced OH cos por un() ) Fle A 4 73 (0) Home Insert Page Layout Formulas Data Review View HelpDYMO Label QuickBooks X V for PA-1A Assign overhead using traditional costing and ABC; compute unit costs; classify activities as value- or non-values A B C D ABC Manufacturing Costs Direct materials Value Value Direct labor Overhead Total cost per unit Model Model Value Value Value Value 80 (0) | Activity Receiving Forming Assembly Testing Painting Packing and shipping Value- vs. Non-Value Added classification classification classification classification classification classification 84 890 Comment on (1) the comparative overhead cost per unit for the two products under ABC, and (2) the comparative total costs per unit under traditional costing and ABC 97 After you have completed P4-1A, consider the additional question. Assume that total ostmated overhead costs for Receiving. Assembly and Painting changed lo $110,400, $425,000, and $72,600 respectively. Redo Instructions (0) to (c) and round overhead 100 roles to two decimal points. 981. 101 102 203