Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I need help with the last question b). please and thanks! Bonita Fire, Inc. manufactures steel cylinders and nozzles for two models of re extinguishers:

I need help with the last question b). please and thanks!

image text in transcribedimage text in transcribed
Bonita Fire, Inc. manufactures steel cylinders and nozzles for two models of re extinguishers: [1} a home re extinguisher and [2} a commercial re extinguisher. The home model is a highvolu me (54,000 units}, halfgallon cylinder that holds 2 1,12 pounds of multi purpose dry chemical at 480 PSI. The commercial model is a lowvolume [10,200 units], twogallon cylinder that holds 10 pounds of multipurpose dry chemical at 390 PSI. Both products require 1.5 hours ofdirect labor for completion.Therefore, total annual direct labor hours are 96,300 or [1.5 hours X {54,000 + 10,200\". Estimated annual manufacturing overhead is $ 1,581,808. Thus, the predetermined overhead rate is $ 16.43 or {$ 1,581,808 + 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 identied six activity cost pools and related cost drivers and accumulated overhead by cost pool as follows. Use of Drivers by Product Estimated Use of Activity Cost Pools Cost Drivers Estimated Overhead Cost Drivers Home Commercial Receiving Pounds $ 87,100 335,000 2 15,000 120,000 Forming Machine hours 152,950 35,000 27,000 8,000 Assembling N umber of pa rts 410,130 217,000 165,000 52,000 Testing N umber of tests 53,040 25,500 15,500 10,000 Painting Gallons 57,838 5,258 3,680 1,578 Packingand shipping Pounds 820,750 335,000 215,000 120,000 53 1,58 1,808 V Your answer is correct. U nder traditional product costing, compute the total unit cost of each product. {Round answers t02 decimal places, e3. 12.50.) Home Model Commercial Model Total unit cost $ 62.14 $ 70.14 (b) 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 Estimated Estimated Activity-Based Cost Pool Overhead Use of Cost Drivers Overhead Rate per Receiving $ Pounds poun per Machine Forming $ mach hours hour $ per Assembling Parts part Testing Tests per t Painting Gallons $ per gallo Packing and Pounds $ per poun shipping

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

Financial Shenanigans

Authors: Howard Schilit

2nd Edition

0071386262, 9780071386265

More Books

Students also viewed these Accounting questions

Question

b. Where is it located (hospital, research institute, university)?

Answered: 1 week ago

Question

1. Maintain my own perspective and my opinions

Answered: 1 week ago