Question
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
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. Thehome modelis a high-volume (54,000 units), half-gallon cylinder that holds 2 1/2 pounds of multi-purpose dry chemical at 480 PSI. Thecommercial modelis 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 $1,567,900. Thus, the predetermined overhead rate is $16.28or ($1,567,900 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
Cost Drivers
Estimated Overhead
Expected Use of
Cost Drivers
Home
Commercial
Receiving
Pounds
$85,400
335,000
215,000
120,000
Forming
Machine hours
155,000
35,000
27,000
8,000
Assembling
Number of parts
403,000
217,000
165,000
52,000
Testing
Number of tests
45,000
25,500
15,500
10,000
Painting
Gallons
55,500
5,258
3,680
1,578
Packing and shipping
Pounds
824,000
335,000
215,000
120,000
$1,567,900
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
$
$
LINK TO TEXT
vvvvv 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. Thehome modelis a high-volume (54,000 units), half-gallon cylinder that holds 2 1/2 pounds of multi-purpose dry chemical at 480 PSI. Thecommercial modelis 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 $1,567,900. Thus, the predetermined overhead rate is $16.28or ($1,567,900 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
Cost Drivers
Estimated Overhead
Expected Use of
Cost Drivers
Home
Commercial
Receiving
Pounds
$85,400
335,000
215,000
120,000
Forming
Machine hours
155,000
35,000
27,000
8,000
Assembling
Number of parts
403,000
217,000
165,000
52,000
Testing
Number of tests
45,000
25,500
15,500
10,000
Painting
Gallons
55,500
5,258
3,680
1,578
Packing and shipping
Pounds
824,000
335,000
215,000
120,000
$1,567,900
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
$
$
LINK TO TEXT
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
Receiving
$
Pounds
$
per pound
Forming
Machine hours
$
per machine hour
Assembling
Parts
$
per part
Testing
Tests
$
per test
Painting
Gallons
$
per gallon
Packing and shipping
Pounds
$
per pound
$
LINK TO TEXT
LINK TO TEXT
LINK TO TEXT
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.)
Home Model
Commercial Model
Activity Cost Pool
Expected Use of
Drivers
Activity-Based
Overhead Rates
Cost Assigned
Expected Use of
Drivers
Activity-Based
Overhead Rates
Cost Assigned
Receiving
$
$
$
$
Forming
$
$
Assembling
$
$
Testing
$
$
Painting
$
$
Packing and shipping
$
$
Total costs assigned (a)
$
$
Units produced (b)
Overhead cost per unit [(a) (b)]
$
$
LINK TO TEXT
LINK TO TEXT
LINK TO TEXT
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
Classify each of the activities as a value-added activity or a non-value-added activity.
Activity
Receiving
Value-added
Non-value-added
Forming
Value-added
Non-value-added
Assembling
Value-added
Non-value-added
Testing
Value-added
Non-value-added
Painting
Non-value-added
Value-added
Packing and shipping
Non-value-added
Value-added
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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 highvolume (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 $1,567,900. Thus, the predetermined overhead rate is $16.28 or ($1,567,900 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 Produc Activity Cost Pools Cost Drivers Estimated Overhead Expected Use of Cost Drivers Home Commerc Receiving Pounds $85,400 335,000 215,000 Forming Machine hours 155,000 35,000 27,000 Assembling Number of parts 403,000 217,000 165,000 5 Testing Number of tests 45,000 25,500 15,500 1 Painting Gallons 55,500 5,258 3,680 Packing and shipping Pounds 824,000 335,000 215,000 $1,567,900 Under traditional product costing, compute the total unit cost of each product. (Round answers to 2 decimal places, e.g. 12.25.) Home Model Total unit cost Commercial Model $ $ LINK TO TEXT 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 $ Receiving Activity-Based Overhead Rate $ Pounds per pound 12 12 Forming Machine hours Assembling Parts Testing Tests Painting Gallons $ per machine hour $ per part $ per test $ per gallon $ Packing and shipping Pounds per pound $ LINK TO TEXT LINK TO TEXT LINK TO TEXT 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.) Home Model Activity Cost Pool Expected Use of Drivers ActivityBased Overhead Rates Commercial Model Expected Use of Drivers Cost Assigned $ $ ActivityBased Overhead Rates Cost Assigned $ Receiving $ $ $ $ Forming Assembling $ $ $ $ $ $ $ Testing Painting Packing and shipping Total costs assigned (a) $ $ $ $ Units produced (b) Overhe ad cost per unit [(a) (b)] LINK TO TEXT LINK TO TEXT LINK TO TEXT Compute the total cost per unit for each product under ABC. (Round answer to 2 decimal places, e.g. 12.25.) Home Model Total cost per unit $ Commercial Model $ LINK TO TEXT LINK TO TEXT LINK TO TEXT Classify each of the activities as a value-added activity or a non-value-added activity. Activity Receiving Forming Assembling Testing Painting Packing and shipping Click if you would like to Show Work for this question: Open Show Work
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