Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 3-2A 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
Problem 3-2A 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 11.5 hours x (54,000 + 10,200)). Estimated annual manufacturing overhead is $1,576,578. Thus, the predetermined overhead rate is $16.37 or ($1,576,578 -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. Estimated Use of Drivers by Product Estimated Use of Activity Cost Pools Cost Drivers Estimated Overhead Cost Drivers Home Commercial S750 235.000 215.000 120000 35.000 27.000 412 300 217.0ool 165.000 47 90 57 . Under traditional product costing, compute the total unit cost of each product. Show work. Home model Commercial Total Unit cost Under ABC, prepare a schedule showing the computations of the activity-based overhead rates (per cost driver). Activity Cost Pool Estimated Estimated Use of Cost vers Activity-based Overhead Rate Receiving Forming Assembling Testing Parong Packing and Shin Prepare a schedule assigning each activity's overhead cost pool to each product based on the use of cost drivers

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_2

Step: 3

blur-text-image_3

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

Authors: Walter T. Harrison Jr., Charles T. Horngren, C. William Thom

9th edition

978-0132751216, 132751127, 132751216, 978-0132751124

More Books

Students also viewed these Accounting questions

Question

Why would Xerox be concerned about its name becoming generic?P-968

Answered: 1 week ago