Problem 17-1A Combat Fire, 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)]. Expected annual manufacturing overhead is $1,568,500. Thus, the predetermined overhead rate is $16.29 or ($1,568,500 = 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: Expected Use of Drivers by Product Activity Cost Pools Receiving Forming Assembling Testing Painting Packing and shipping Cost Drivers Pounds Machine hours Number of parts Number of tests Gallons Pounds Estimated Overhead $83,900 153,000 402,000 53,000 53,600 823,000 $1,568,500 Expected Use of Cost Drivers 335,000 35,000 217,000 25,500 5,258 335,000 Home 215,000 27,000 165,000 15,500 Commercial 120,000 8,000 52,000 10,000 1,578 120,000 3,680 215,000 Your answer has been saved and sent for grading. Under traditional product costing, compute the total unit cost of each product. (Round answers to 2 decimal places, e.g. 12.25.) Home Model Commercial Model Total unit cost 61.97 69.97 LINK TO TEXT ZYour answer has been saved and sent for grading. 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 Expected Use of Cost Drivers Activity-Based Overhead Rate 0.25 per pound Receiving 83900 $ Forming 153000 335000 Pounds 35000 Machine hours 217000 Parts 4.37 per machine hour 402000 1.85 per part $ Assembling Testing 53000 25500 Tests $ 2.08 per test Painting 53600 5258 Gallons $ 10.19 per gallon Packing and shipping 823000 335000 Pounds $ 2.46 per pound $ 1568500 LINK TO TEXT LINK TO TEXT LINK TO TEXT ZYour answer has been saved and sent for grading. 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.) Expected Use of Activity Cost Pool Home Model Activity-Based Overhead Rates Expected Use of Drivers Cost Assigned Commercial Model Activity-Based Overhead Rates Drivers Cost Assigned Receiving 335000 83900 $ 0.25 $ Forming 35000 $ 153000 4.37 217000 $ 402000 $ 1.85 Assembling Testing 25500 $ 53000 $ 2.08 Painting 5258 $ 53600 10.19 $ $ Packing and shipping 335000 $ 823000 2.46 Total costs assigned (a) Units produced (b) Overhead cost per unit [(a) + (b)] Your answer has been saved and sent for grading. Compute the total cost per unit for each product under ABC. (Round answer to 2 decimal places, e.g. 12.25.) Home Model Commercial Model Total cost per unit LINK TO TEXT LINK TO TEXT LINK TO TEXT ZYour answer has been saved and sent for grading. Classify each of the activities as a value-added activity or a non-value-added activity. Activity Receiving Non-value-added Forming Value-added Assembling Value-added Testing Non-value-added Painting Value-added Packing and shipping Non-value-added LINK TO TEXT
