Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 17-1A (Part Level Submission) Combat Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and

image text in transcribed
image text in transcribed
Problem 17-1A (Part Level Submission) 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 s S1 563,000. Thus, the predetermined overhead rate is $16.44 or ($1,583,000 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 Activity Cost PoolsCost Drivers Receiving Forming Estimated OverheadCost DriversHome Commercial $81,000 146,000 415,000 55,000 61,000 825,000 $1,583,000 335,000 215,000 35,00027,000 217,000 165,000 25,500 15,500 ,2583,680 335,000 215,000 120,000 8,000 52,000 10,000 1,578 120,000 Machine hours Number of parts Number of tests Testing Packing and shipping Pounds

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 An International Introduction

Authors: David Alexander, Christopher Nobe

6th Edition

1292102993, 978-1292102993

More Books

Students also viewed these Accounting questions