Question
heeeeeelp need asap Please only answer if it's complete and you're certain it's correct. I really need the answers as simple as possible, but I'll
heeeeeelp need asap
Please only answer if it's complete and you're certain it's correct. I really need the answers as simple as possible, but I'll be giving a positive rating for sure!
Thank you.
FireOut, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: the Home Model and the Commercial Model. The following overhead cost information is available:
Budgeted Overhead:
Receiving $ 69,580
Forming 150,500
Assembling 412,300
Testing 51,000
Painting 52,580
Packing and Shipping 824,100
________
Total Budgeted Overhead Costs $ 1,560,060
Direct Labor Hours:
Home 81,000
Commercial 15,300
________
Total Direct Labor Hours 96,300
Cartons (the cost driver for Receiving) Home 700
Commercial 300
________
Total Cartons 1,000
Machine Hours (the cost driver for Forming) Home 27,000
Commercial 8,000
________
Total Machine Hours 35,000
Number of Parts (the cost driver for Assembling) Home 165,000
Commercial 52,000
________
Total Number of Parts 217,000
Number of Tests (the cost driver for Testing) Home 15,500
Commercial 10,000
________
Total Tests 25,500
Gallons of Paint (the cost driver for Painting) Home 3,680
Commercial 1,578
________
Total Gallons 5,258 Pounds
(the cost driver for Packing and Shipping) Home 215,000
Commercial 120,000
________
Total Pounds 335,000
Expected production of the Home Model is 54,000 units and of the Commercial Model 10,200 units.
REQUIRED: A.
If FireOut uses a single plant wide overhead rate based on direct labor hours, compute the following:
1. The plant-wide overhead rate
2. The total overhead cost assigned to the Home Model
3. The total overhead cost assigned to the Commercial Model
4. The per unit overhead cost of the Home Model
5. The per unit overhead cost of the Commercial Model
B. If FireOut uses activity based costing with the following cost pools--Receiving, Forming, Assembling, Testing, Painting, and Packing and Shipping, compute the following:
1. The overhead rate for each individual cost pool based on the given cost drivers
2. The total overhead cost assigned to the Home Model
3. The total overhead cost assigned to the Commercial Model
4. The per unit overhead cost of the Home Model
5. The per unit overhead cost of the Commercial Model
C. Did the use of a single plant wide overhead rate lead to cost distortion for either model?
How did activity based costing eliminate any cost distortion?
D. Indicate whether the specific activities associated with the 6 activity cost pools would generally be value added or non-value added activities.
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