| | Problem 4-1A a-e (Video) 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)]. Estimated annual manufacturing overhead is $1,575,500. Thus, the predetermined overhead rate is $16.36 or ($1,575,500 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. | | | | | | | | | Estimated Use of Drivers by Product | | Activity Cost Pools | | Cost Drivers | | Estimated Overhead | | Estimated Use of Cost Drivers | | Home | | Commercial | | Receiving | | Pounds | | $87,100 | | 335,000 | | 215,000 | | 120,000 | | Forming | | Machine hours | | 151,900 | | 35,000 | | 27,000 | | 8,000 | | Assembling | | Number of parts | | 410,130 | | 217,000 | | 165,000 | | 52,000 | | Testing | | Number of tests | | 53,040 | | 25,500 | | 15,500 | | 10,000 | | Painting | | Gallons | | 52,580 | | 5,258 | | 3,680 | | 1,578 | | Packing and shipping | | Pounds | | 820,750 | | 335,000 | | 215,000 | | 120,000 | | | | | | $1,575,500 | | | | | | | | | | | | Under traditional product costing, compute the total unit cost of each product. (Round answers to 2 decimal places, e.g. 12.50.) | | | Home Model | | Commercial Model | | Total unit cost | | $ | | $ | | | | | | 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 | | Estimated Use of Cost Drivers | | Activity-Based Overhead Rate | | Receiving | | $ | | | | Pounds | | $ | per pound | | Forming | | | | | | Machine hours | | $ | per machine hour | | Assembling | | | | | | Parts | | $ | per part | | Testing | | | | | | Tests | | $ | per test | | Painting | | | | | | Gallons | | $ | per gallon | | Packing and shipping | | | | | | Pounds | | $ | per pound | | | | $ | | | | | | | |
