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Problem 4-1A - (Video) Combat Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2)
Problem 4-1A - (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 $1,573,108. Thus, the predetermined overhead rate is $16.34 or ($1,573,108 = 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 Estimated Cost Cost Pools Drivers Overhead Drivers Home Commercial Receiving Pounds $87.100 335,000 215,000 120,000 Forming Machine 150,150 35,000 hours 27,000 8,000 Number Assembling 399,280 217,000 165,000 52.000 Number Testing 47,940 25,500 of tests 15,500 10.000 Painting Gallons 57,838 5,258 3,680 1,578 Packing and Pounds shipping 830,000 335,000 215,000 120,000 $1,573,108 of parts Your answer is correct. Under traditional product costing, compute the total unit cost of each product. (Round answers to 2 decimal places, e.g. 12.50.) Home Model Commercial Model Total unit cost 62.01 70.01 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 Estimated Activity Cost Pool Overhead Use of Cost Drivers Activity-Based - Overhead Rate Receiving s67100335000 Pounds 25 per pound Forming 150150 35000 Machine hours 4.29 per machine hour Assembling 199280217000 Parts 1.84 per part Testing 47940 1.8 per test Painting 5783 525 Gallons 11 per gallon Packing and shipping 5J0800 335000 Pounds 2.48 per pound $ 1573100 25ool Tests Your answer is incorrect. Try again. Prepare a schedule assigning each activity's overhead cost pool to each product based on the use of cost drivers (Round overhead cost per unit to 2 decimal places, eg. 12.3 Home Model Commercial Model Estimated Use of Activity-Based Estimated Use of Activity-Based Activity Cost Pool Drivers Overhead Rates Cost Assigned Drivers Overhead Rates Cont Assigned Receiving Forming Assembling Testing pois Painting Packing and shipping Your answer is incorrect. Try again. Compute the total cost per unit for each product under ABC. (Round answer to 2 decimal places, e.g. 12.25.) Total costs assigned (a) Home Model Commercial Model Units produced (0) Overhead cost per unit [(a) ()] Total cost per unit
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