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