Question
Problem 17-01A a-e (Video) (Part Level Submission) Concord, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher
Problem 17-01A a-e (Video) (Part Level Submission)
Concord, 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 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 (54,000 + 10,200)]. Estimated annual manufacturing overhead is $1,588,566. Thus, the predetermined overhead rate is $16.50 or ($1,588,566 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.
Problem 17-01A a-e (Video) (Part Level Submission) Concord, 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 of multi-purpose dry chemical at 390 PSI. Both products require 1.5 hours of direct labor for completion. Therefore, total annual d rect labor ours re 96,500 or [15 hours 54000 102001 Estimated annual manufacturing overhead is $1,588,566. Thus, the predetermined overhead rate is $16.50 or ($1,588,566 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 Pounds Machine hours Number of parts Number of tests Estimated Overhead $87,100 155,050 412,300 46,920 63,096 824,100 $1,588,566 Home Commercial 335,000 215,000 35,000 27,000 217,000 165,000 25,500 15,500 120,000 t, 10,000 120,000 Forming Testing Painting Packing and shipping Pounds 335,000 215,000 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 Receiving Forming Assembling Testing Painting Packing and shipping Estimated Use of Cost Drivers Activity-Based Overhead Rate Overhead Pounds per pound per machine hour per part per test per gallorn per pound Machine hours Parts Tests Gallons Pounds Click if you would like to Show Work for this question: Open Show WorkStep by Step Solution
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