Question 9 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 (50,000 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- valume (10,740 units), twaitre cylinder that holds 10 kilogrars of mu-purpose cry chemical at 300 PSI. Both products require 1.25 hours of direct labour for completion Therefore, total annual direct labour hours are 75,925 or (i 25 hrs. x (50,000 + 10,740). Estimated annual manufacturing overhead is $1,519,500. Thus, the predetermined overhead rate is $20.00 ar ($1.519,500 - 75.925) per direct labour hour. The direct materials cost per unit is $16.76 for the home model and $25.20 for the commercial model. The direct labour cost is $20.00 per unit for both the home and commerciel 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 Fanning Machine hour Assembling Number of parts Tessing Number of beses Painting Litres Packing and shipping Kilograms Estimated Estimated Use Estimated Use Overhead of Cost Drivers of Drivers by Product Home Commercial $67,000 335,000 215,000 120,000 148,000 37,000 78,000 0,00 394,200 219.000 105,000 53,000 51,309 27,000 18, DOO 11,000 54,000 S.000 4,000 2.000 301.000 325 DUO 215.000 120,00 $1,518,500 Under traditional product casting, calculate the total unit cost of each product. Frepare a simple comparative schedule of the individual costs by product. (Round answers to 2 decimal places, e.g. 15.25.) Products Manufacturing Costs Home Model Commercial Model Direct matenala $ Direct labour Overhead Total unit cost Under ABC, prepare a schedule showing the calculations of the activity-based overhead rates (per cost driver!. (Round rate per cost driver to 2 decimal places, e.g. 15.25 and other answers to o decimal places e.g. 1525.) Est. Est. Cast Cost Pool MOH Usage Rate Drivers Receiving per kilogram Forming per machine hr S $ Assembly $ per part Testing per test 5 $ Painting S $ per litre Packing and shippings $ per kilogram Prepare a schedule assigning each activity's overhead cost sool to each product based on the use of cost drivers. (Round per unit cost to 2 decimal places, e.g. 15.25 and other answers to O decimal places e.g. 1525.) Activity-based overhead applied Home Commercial Receiving-kilograms Forming-machine hours Essembly-number of parts Testing-number of reste Painting-litres Packing and shipping kilogramy Total overhead applied s $ Total units praduced Per unit overhead cost s Calculate the total cost per unit for each product under 18C. (Round answers to z decimal places, e.g. 15.25.) Home Commercial Per unit cost Classity each of the activities as a value-added activity or a non-value-added activity, Receiving Forming Assembling Testing Nuri-value-added Painting Value-added Facking and shipping
