Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 17-1A (Part Level Submission) FireOut, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2)

Problem 17-1A (Part Level Submission) FireOut, 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 multipurpose 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 hrs. x (54,000 + 10,200)]. Expected annual manufacturing overhead is $ 1,558,280 . Thus, the predetermined overhead rate is $ 16.18 or ($ 1,558,280 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 $ 74,900 335,000 215,000 120,000 Forming Machine hours 152,500 35,000 27,000 8,000 Assembling Number of parts 404,800 217,000 165,000 52,000 Testing Number of tests 45,700 25,500 15,500 10,000 Painting Gallons 52,580 5,258 3,680 1,578 Packing and shipping Pounds 827,800 335,000 215,000 120,000 $ 1,558,280 Collapse question part (a) Correct answer. Your answer is correct. 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 $ Entry field with correct answer 61.77 $ Entry field with correct answer 69.77 SHOW SOLUTION SHOW ANSWER LINK TO TEXT Attempts: 2 of 3 used Collapse question part (b) Correct answer. Your answer is correct. 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 $ Entry field with correct answer 74900 Entry field with correct answer 335000 Pounds $ Entry field with correct answer 0.22 per pound Forming Entry field with correct answer 152500 Entry field with correct answer 35000 Machine hours $ Entry field with correct answer 4.36 per machine hour Assembling Entry field with correct answer 404800 Entry field with correct answer 217000 Parts $ Entry field with correct answer 1.87 per part Testing Entry field with correct answer 45700 Entry field with correct answer 25500 Tests $ Entry field with correct answer 1.79 per test Painting Entry field with correct answer 52580 Entry field with correct answer 5258 Gallons $ Entry field with correct answer 10 per gallon Packing and shipping Entry field with correct answer 827800 Entry field with correct answer 335000 Pounds $ Entry field with correct answer 2.48 per pound $ Entry field with correct answer 1558280 SHOW ANSWER LINK TO TEXT Attempts: 2 of 3 used Collapse question part (c) Correct answer. Your answer is correct. 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 Entry field with correct answer 215000 $ Entry field with correct answer 0.22 $ Entry field with correct answer 47300 Entry field with correct answer 120000 $ Entry field with correct answer 0.22 $ Entry field with correct answer 26400 Forming Entry field with correct answer 27000 $ Entry field with correct answer 4.36 $ Entry field with correct answer 117720 Entry field with correct answer 8000 $ Entry field with correct answer 4.36 $ Entry field with correct answer 34880 Assembling Entry field with correct answer 165000 $ Entry field with correct answer 1.87 $ Entry field with correct answer 308550 Entry field with correct answer 52000 $ Entry field with correct answer 1.87 $ Entry field with correct answer 97240 Testing Entry field with correct answer 15500 $ Entry field with correct answer 1.79 $ Entry field with correct answer 27745 Entry field with correct answer 10000 $ Entry field with correct answer 1.79 $ Entry field with correct answer 17900 Painting Entry field with correct answer 3680 $ Entry field with correct answer 10 $ Entry field with correct answer 36800 Entry field with correct answer 1578 $ Entry field with correct answer 10 $ Entry field with correct answer 15780 Packing and shipping Entry field with correct answer 215000 $ Entry field with correct answer 2.48 $ Entry field with correct answer 533200 Entry field with correct answer 120000 $ Entry field with correct answer 2.48 $ Entry field with correct answer 297600 Total costs assigned (a) $ Entry field with correct answer 1071315 $ Entry field with correct answer 489800 Units produced (b) Entry field with correct answer 54000 Entry field with correct answer 10200 Overhead cost per unit [(a) (b)] $ Entry field with correct answer 19.84 $ Entry field with correct answer 48.02 SHOW ANSWER LINK TO TEXT Attempts: 1 of 3 used Collapse question part (d) Correct answer. Your answer is correct. 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 $ Entry field with correct answer 57.34 $ Entry field with correct answer 93.52 SHOW SOLUTION SHOW ANSWER LINK TO TEXT Attempts: 1 of 3 used Collapse question part (e) Classify each of the activities as a value-added activity or a nonvalue-added activity. Activity Receiving Forming Assembling Testing Painting Packing and shipping

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

Auditing Principles Practice And Problems

Authors: Jagdish Prakash

1st Edition

9327244745, 978-9327244748

More Books

Students also viewed these Accounting questions

Question

Differentiate tan(7x+9x-2.5)

Answered: 1 week ago

Question

Explain the sources of recruitment.

Answered: 1 week ago

Question

Differentiate sin(5x+2)

Answered: 1 week ago

Question

Compute the derivative f(x)=1/ax+bx

Answered: 1 week ago

Question

2. Are my sources up to date?

Answered: 1 week ago