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 $1,585,316. Thus, the predetermined overhead rate is $16.46 or ($1,585,316+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 (a) Cost Drivers Total unit cost Pounds Machine hours Number of parts Number of tests Gallons Pounds Estimated Overhead $90,450 Home Model 150,850 401,450 52,020 63,096 827,450 $1,585,316 Estimated Use of Cost Drivers 335,000 35,000 217,000 Commercial Model 215,000 27,000 165,000 15,500 5,258 3,680 335,000 215,000 Home 25,500 Commercial 120,000 8,000 Under traditional product costing, compute the total unit cost of each product. (Round answers to 2 decimal places, eg 12.50) 52,000 10,000 1.578 120,000
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 $1,585,316. Thus, the predetermined overhead rate is $16.46 or ($1,585,316+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 (a) Cost Drivers Total unit cost Pounds Machine hours Number of parts Number of tests Gallons Pounds Estimated Overhead $90,450 Home Model 150,850 401,450 52,020 63,096 827,450 $1,585,316 Estimated Use of Cost Drivers 335,000 35,000 217,000 Commercial Model 215,000 27,000 165,000 15,500 5,258 3,680 335,000 215,000 Home 25,500 Commercial 120,000 8,000 Under traditional product costing, compute the total unit cost of each product. (Round answers to 2 decimal places, eg 12.50) 52,000 10,000 1.578 120,000
Cornerstones of Cost Management (Cornerstones Series)
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ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
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Chapter17: Activity Resource Usage Model And Tactical Decision Making
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please answer: total unit cost, calculation of activity rates, allocation of
![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 $1,585,316. Thus, the
predetermined overhead rate is $16.46 or ($1,585,316+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
Gallons
Packing and shipping Pounds
(a)
Total unit cost
Cost Drivers
$
Pounds
Machine hours
Number of parts
Number of tests
Estimated Overhead
Home Model
$90,450
150,850
401,450
52,020
63,096
827,450
$1,585,316
Estimated Use of
Cost Drivers
Commercial Model
Home
335,000
35,000 27,000
217,000 165,000
15,500
5,258
3,680
335,000 215,000
25,500
215,000
Commercial
120,000
8,000
Under traditional product costing, compute the total unit cost of each product. (Round answers to 2 decimal places, eg 12.50)
52,000
10,000
1.578
120,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F344e5796-d304-4889-a0e0-06ab7f23b967%2F6c90eba2-26a3-4aa9-bfd7-e60eb5805e39%2F4ahd96cm_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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 $1,585,316. Thus, the
predetermined overhead rate is $16.46 or ($1,585,316+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
Gallons
Packing and shipping Pounds
(a)
Total unit cost
Cost Drivers
$
Pounds
Machine hours
Number of parts
Number of tests
Estimated Overhead
Home Model
$90,450
150,850
401,450
52,020
63,096
827,450
$1,585,316
Estimated Use of
Cost Drivers
Commercial Model
Home
335,000
35,000 27,000
217,000 165,000
15,500
5,258
3,680
335,000 215,000
25,500
215,000
Commercial
120,000
8,000
Under traditional product costing, compute the total unit cost of each product. (Round answers to 2 decimal places, eg 12.50)
52,000
10,000
1.578
120,000
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