Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
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 x (54,000 + 10,200)]. Expected annual manufacturing overhead is $1,567,000. Thus, the predetermined overhead rate is $16.27 or $1,567,000 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 Expected Use of Cost Drivers Home Commercial 120,000 8,000 52,000 10,000 1,578 120,000 Activity Cost Pools Cost Drivers Estimated Overhead $83,700 152,000 402,000 49,000 53,300 827,000 $1,567,000 35,000215,000 35,000 27,000 217,000 165,000 25,500 15,500 5,258 3,680 335,000 215,000 Machine hours Number of parts Number of tests Assembling Testing Painting Packing and shipping Pounds 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

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 Accounting For School Administrators Tools For School

Authors: Ronald E. Everett, Donald R. Johnson, Bernard W. Madden

3rd Edition

1610487710, 978-1610487719

More Books

Students also viewed these Accounting questions