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 $1,584,280. Thus, the predetermined overhead rate is $16.45 or ($1,584,280 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 companys 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		$80,400		335,000		215,000		120,000
Forming		Machine hours		150,500		35,000		27,000		8,000
Assembling		Number of parts		412,300		217,000		165,000		52,000
Testing		Number of tests		51,000		25,500		15,500		10,000
Painting		Gallons		52,580		5,258		3,680		1,578
Packing and shipping		Pounds		837,500		335,000		215,000		120,000
				$1,584,280

Prepare a schedule assigning each activitys 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)]

$

$

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		$		$