Question 4 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 x (54,00010,200)]. Expected annual manufacturing overhead is $1,578,800. Thus, the predetermined overhead rate is $16.39 or ($1,578,800 commercial model. The direct labor cost is $19 per unit for both the home and the commercial models 96,300) per direct labor hour. The direct materials cost per unit is $18.50 for the home model and $26.50 for the The company's managers identified six activity cost pools and related cost drivers and accumulated overhead by cost pool as follows: Expected Use of Drivers by Product Expected Use of Cost Drivers Estimated Overhead Commercial Activity Cost Pools Cost Drivers Home Receiving Pounds $87,800 335,000 215,000 120,000 Machine hours Forming 154,000 35,000 27,000 8,000 Assembling Number of parts 407,000 217,000 165,000 52,000 Testing Number of tests 45,000 15,500 25,500 10,000 Gallons 1,578 Painting 61,000 5,258 3,680 Packing and shipping Pounds 335,000 215,000 120.000 824,000 $1,578,800 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 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-Based Overhead Rate Expected Use of Cost Drivers Estimated Overhead Activity Cost Pool Pounds Receiving per pound Machine hours Forming per machine hour Assembling Parts per part Testing Tests per test Painting Gallons per gallon Packing and shipping Pounds per pound 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, e.g. 12.25 and cost assigned to 0 decimal places, e.g. 2,500.) Commercial Model Home Model Expected Use of Expected Use of Activity-Based Drivers Activity-Based Overhead Rates Cost Assigned Activity Cost Pool Overhead Rates Cost Assigned Drivers Receiving Forming $ Assembling Testing S Painting Packing and shipping Total costs assigned (a) $ Units produced (b) Overhead cost per unit [(a) (b)] $ 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 $ $ LINK TO TEXT LINK TO TEXT LINK TO TEXT VIDEO: SIMI Classify each of the activities as a value-added activity or a non-value-added activity Activity Receiving Forming Assembling Testing Painting Packing and shipping Click if you would like to Show Work for this question: Open Show Work
