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Question 2 FireOut Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a commercial fire
Question 2 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 (58,000 units), half-litre cylinder that holds 2.5 kilograms of multi-purpose dry chemical at 480 PSI (pounds per square inch). The commercial model is a low-volume (16,915 units), two-litre cylinder that holds 10 kilograms of multi-purpose dry chemical at 390 PSI. Both products require 2.00 hours of direct labour completion. Therefore, total annual direct labour hours are 149,830 or [2.00 hrs. x (58,000 + 16,915)]. Estimated annual manufacturing overhead is $1,498,300. Thus, the predetermined overhead rate is $10.00 or ($1,498,300 149,830) per direct labour hour. The direct materials cost per unit is $18.92 for the home model and $27.08 for the commercial model. The direct labour cost is $19.60 per unit for both the home and commercial models. The company's managers identified six activity cost pools and related cost drivers, and estimated overhead by cost pool as follows: Activity Cost Pools Cost Drivers Receiving Kilograms Forming Machine hours Assembling Number of parts Testing Number of tests Painting Litres Packing and shipping Kilograms Estimated Estimated Use Estimated Use Overhead of Cost Drivers of Drivers by Product Home Commercial $67,400 337,000 216,000 121,000 151,200 36,000 28,000 8,000 396,000 220,000 167,000 53,000 54,000 27,000 16,000 11,000 54,600 7,000 4,000 3,000 775,100 337,000 216,000 121,000 $1,498,300 x Your answer is incorrect. Try again. Calculate the total cost per unit for each product under ABC. (Round answers to 2 decimal places, e.g. 15.25.) Home Commercial Per unit cost 6807.51 253.67 LINK TO TEXT LINK TO TEXT LINK TO TEXT Your answer is correct
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