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Sunland Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a commercial fire extinguisher. The

Sunland 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 ( 40,000 units), half-litre cylinder that holds 2.50 kilograms of multi-purpose dry chemical at 480 PSI (pounds per square inch). The commercial model is a low-volume ( 9,000 units), two-litre cylinder that holds 10 kilograms of multi-purpose dry chemical at 390 PSI. Both products require 1.25 hours of direct labour for completion. Therefore, total annual direct labour hours are 61,250 or [ 1.25 hrs. ( 40,000 + 9,000)]. Estimated annual manufacturing overhead is $ 1,489,600. Thus, the predetermined overhead rate is $ 24.32 or ($ 1,489,600 61,250) per direct labour hour. The direct materials cost per unit is $ 18.40 for the home model and $ 26.48 for the commercial model. The direct labour cost is $ 19.40 per unit for both the home and commercial models. The companys managers identified six activity cost pools and related cost drivers, and estimated overhead by cost pool as follows:

Activity Cost Pools

Cost Drivers

Estimated Overhead

Estimated Use of Cost Drivers

Use of Drivers by Product

Home

Commercial

Receiving

Kilograms

$ 67,400

337,000

217,000

120,000

Forming

Machine hours

151,700

37,000

29,000

8,000

Assembling

Number of parts

390,600

217,000

165,000

52,000

Testing

Number of tests

52,000

26,000

16,000

10,000

Painting

Litres

52,800

6,000

4,000

2,000

Packing and shipping

Kilograms

775,100

337,000

217,000

120,000

$ 1,489,600

(a)

Correct answer icon

Your answer is correct.

Under traditional product costing, calculate the total unit cost of each product. Prepare 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 materials

$ enter a dollar amount

$ enter a dollar amount

Direct labour

enter a dollar amount

enter a dollar amount

Overhead

enter a dollar amount

enter a dollar amount

Total unit cost

$ enter a total amount

$ enter a total amount

eTextbook and Media

Attempts: 1 of 3 used

(b)

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Your answer is correct.

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 0 decimal places e.g. 1525.)

Cost Pool

Est. MOH

Est. Usage

Rate

Cost Drivers

Receiving

$ enter a dollar amount

enter a dollar amount

$ enter a dollar amount rounded to 2 decimal places

per kilogram

Forming

$ enter a dollar amount

enter a dollar amount

$ enter a dollar amount rounded to 2 decimal places

per machine hr.

Assembly

$ enter a dollar amount

enter a dollar amount

$ enter a dollar amount rounded to 2 decimal places

per part

Testing

$ enter a dollar amount

enter a dollar amount

$ enter a dollar amount rounded to 2 decimal places

per test

Painting

$ enter a dollar amount

enter a dollar amount

$ enter a dollar amount rounded to 2 decimal places

per litre

Packing and shipping

$ enter a dollar amount

enter a dollar amount

$ enter a dollar amount rounded to 2 decimal places

per kilogram

$ enter a total amount

eTextbook and Media

Attempts: 2 of 3 used

(c)

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Your answer is partially correct.

Prepare a schedule assigning each activitys overhead cost pool 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 0 decimal places e.g. 1525.)

Activity-based overhead applied

Home

Commercial

Receivingkilograms

$ enter a dollar amount

$ enter a dollar amount

Formingmachine hours

enter a dollar amount

enter a dollar amount

Assemblynumber of parts

enter a dollar amount

enter a dollar amount

Testingnumber of tests

enter a dollar amount

enter a dollar amount

Paintinglitres

enter a dollar amount

enter a dollar amount

Packing and shippingkilograms

enter a dollar amount

enter a dollar amount

Total overhead applied

$ enter the total overhead applied in dollars

$ enter the total overhead applied in dollars

Total units produced

enter a total number of units

enter a total number of units

Per unit overhead cost

$ enter the per unit overhead cost in dollars rounded to 2 decimal places

$ enter the per unit overhead cost in dollars rounded to 2 decimal places

eTextbook and Media

Attempts: 3 of 3 used

(d)

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

$ enter a dollar amount rounded to 2 decimal places

$ enter a dollar amount rounded to 2 decimal places

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