Question 8 of 12 -/1 View Policies Current Attempt in Progress 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 PSL. Both products require 15 hours of direct labor for completion. Therefore, total annual direct labor hours are 96,300 or 1.5 hours * (54,000 + 10.2001). Estimated annual manufacturing overhead is $1.590,008. Thus, the predetermined overhead rate is $16.51 or ($1.590,008 +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 Activity Cost Pools Receiving Forming Assembling Testing Painting Packing and shipping Cost Drivers Pounds Machine hours Number of parts Number of tests Gallons Pounds Estimated Overhead $90.450 155,050 412.300 46,920 57.838 827,450 $1,590,000 Estimated Use of Cost Drivers 335,000 35.000 217,000 25,500 5.258 335.000 Home 215,000 27,000 165,000 15 500 3.680 215.000 Commercial 120.000 8.000 52.000 10,000 1578 120.000 % 5 3 4. & 7 6 8 ER Y U Question 8 of 12 -/1 Home Model Commercial Model Total unit cost eTextbook and Media Under ABC.prepare a schedule showing the computations of the activity based overhead rates (per cost driver). Round overhead rate to 2 decimal places, s. 12.25) Activity Cost Pool Estimated Overhead Estimated Use of Cost Drivers Pounds Activity-Based Overhead Rate Receiving pe pos Forming Machine hours S pe ma ho pe Assembling Parts $ Testing Tests $ pe Painting Gallons $ pe sal Packing and shipping Pounds $ DOL 80 DO % 5 3 6 7 8. ER T Y Question 8 of 12 - / 1 HII 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. 12.25 and cost assigned to decimal places, es 2.500) Activity Cost Pool Estimated Use of Drivers Home Model Activity-Based Overhead Rates Cost Assigned Estimate Drivs Receiving Forming $ Assembling $ Testing $ $ $ Painting Packing and shipping Total costs assigned a Units produced th Overhead cost per unita) (bil Sadhanand Media BO % 20 $ 4 3 7 8 ER T Y
