Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Under traditional product costing, compute the total unit cost of each product. Thanks! Bonita Fire, Inc. manufactures steel cylinders and nozzles for two models of

Under traditional product costing, compute the total unit cost of each product. Thanks!

image text in transcribed
Bonita 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 (54,000 + 10,200)]. Estimated annual manufacturing overhead is $ 1,581,808. Thus, the predetermined overhead rate is $ 16.43 or ($ 1,581,808 - 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. Use of Drivers by Product Estimated Use of Activity Cost Pools Cost Drivers Estimated Overhead Cost Drivers Home Commercial Receiving Pounds $ 87,100 335,000 215,000 120,000 Forming Machine hours 152,950 35,000 27,000 8,000 Assembling Number of parts 410,130 217,000 165,000 52,000 Testing Number of tests 53,040 25,500 15,500 10,000 Painting Gallons 57,838 5,258 3,680 1,578 Packing and shipping Pounds 820,750 335,000 215,000 120,000 1,581,808 (a) Under traditional product costing, compute the total unit cost of each product. (Round answers to 2 decimal places, e.g. 12.50.) Home Model Commercial Model Total unit cost $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting What The Numbers Mean

Authors: David Marshall, Wayne McManus, Daniel Viele

10th Edition

77729870, 9780077729875

More Books

Students also viewed these Accounting questions

Question

Speak clearly and distinctly with moderate energy

Answered: 1 week ago

Question

Get married, do not wait for me

Answered: 1 week ago