What electricity cost does the cost equation estimate for a level of activity of 460 machine hours? Electricity costs $ By what amount does this differ from March's observed cost for 460 machine hours? Amount differ $ Activity Estimated Use of Activity-Based Estimated Use of Activit Cost Assigned Cost Pool Drivers Overhead Rates Drivers Overhe $ $ Receiving $ $ Forming S Assembling Testing Painting Packing and shipping S Total $ costs assigned (a) Units produced (b) Overhead cost per unit (a)+(b)) 66 Commercial Model Activity-Based Overhead Rates Cost Assigned $ $ $ $ $ I $ $ $ A 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 (54,000+ 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. Estimated 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 10,000 25,500 15,500 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