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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 (S 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 Estimated Use of Activity Cost Pools Cost Drivers Estimated Overhead Cost Drivers Home Commercial $ 90.450 Receiving Pounds 335,000 215,000 120,000 Forming Machine hours 150,850 35.000 27,000 8,000 Assembling Number of parts 401,450 217.000 165,000 52.000 Testing Number of tests 52,020 25,500 15,500 10.000 Painting Gallons 63,096 5,258 3,680 1,578 Packing and shipping Pounds 827,450 335,000 215,000 120,000 $1.585,316 Under traditional product costing, compute the total unit cost of each product (Round answers to 2 decimal places, eg. 12.50.) Home Model Commercial Model Total unit cost s eTextbook and Media

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 (S 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 Estimated Use of Activity Cost Pools Cost Drivers Estimated Overhead Cost Drivers Home Commercial $ 90.450 Receiving Pounds 335,000 215,000 120,000 Forming Machine hours 150,850 35.000 27,000 8,000 Assembling Number of parts 401,450 217.000 165,000 52.000 Testing Number of tests 52,020 25,500 15,500 10.000 Painting Gallons 63,096 5,258 3,680 1,578 Packing and shipping Pounds 827,450 335,000 215,000 120,000 $1.585,316 Under traditional product costing, compute the total unit cost of each product (Round answers to 2 decimal places, eg. 12.50.) Home Model Commercial Model Total unit cost s eTextbook and Media

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 (S 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 Estimated Use of Activity Cost Pools Cost Drivers Estimated Overhead Cost Drivers Home Commercial Receiving $ 90,450 335,000 Pounds 215,000 120,000 Forming Machine hours 150,850 35,000 27,000 8,000 Assembling Number of parts 401,450 217,000 165,000 52,000 Testing Number of tests 52,020 25,500 15,500 10,000 Painting Gallons 63,096 5.258 3,680 1,578 Packing and shipping Pounds 827,450 335,000 215,000 120,000 $1,585,316 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 eTextbook and Media Under ABC, prepare a schedule showing the computations of the activity-based overhead rates (per cost driver). (Round overhead rate to 2 decimal places, e.g. 12.25.) Activity Estimated Estimated Activity-Based Overhead Use of Cost Drivers Cost Pool Overhead Rate Receiving 24 Pounds 24 Machine Forming 24 hours Assembling Parts $ %24
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 (S 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 Estimated Use of Activity Cost Pools Cost Drivers Estimated Overhead Cost Drivers Home Commercial Receiving $ 90,450 335,000 Pounds 215,000 120,000 Forming Machine hours 150,850 35,000 27,000 8,000 Assembling Number of parts 401,450 217,000 165,000 52,000 Testing Number of tests 52,020 25,500 15,500 10,000 Painting Gallons 63,096 5.258 3,680 1,578 Packing and shipping Pounds 827,450 335,000 215,000 120,000 $1,585,316 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 eTextbook and Media Under ABC, prepare a schedule showing the computations of the activity-based overhead rates (per cost driver). (Round overhead rate to 2 decimal places, e.g. 12.25.) Activity Estimated Estimated Activity-Based Overhead Use of Cost Drivers Cost Pool Overhead Rate Receiving 24 Pounds 24 Machine Forming 24 hours Assembling Parts $ %24
Under ABC, prepare a schedule showing the computations of the activity-based overhead rates (per cost driver). (Round overhead rate to 2 decimal places, e.g. 12.25.) Activity Cost Pool Estimated Estimated Activity-Based Overhead Rate Overhead Use of Cost Drivers Receiving Pounds 24 Machine Forming hours Assembling Parts Testing Tests Painting Gallons Packing and Pounds shipping eTextbook and Media Prepare a schedule assigning each activity's overhead cost pool to each product based on the use of cost drivers. (Round overhead cost per unit to 2 decimal places, e.g. 12.25 and cost assigned to 0 decimal places, e.g. 2,500.) Home Model Estimated Use of Activity Cost Pool Activity-Based Overhead Rates E Drivers Cost Assigned Receiving %24 Forming %24 Assembling 24 Testing Painting Packing and shipping Total costs %24 %24 %24 %24 %24 %24 %24 %24
Transcribed Image Text:Under ABC, prepare a schedule showing the computations of the activity-based overhead rates (per cost driver). (Round overhead rate to 2 decimal places, e.g. 12.25.) Activity Cost Pool Estimated Estimated Activity-Based Overhead Rate Overhead Use of Cost Drivers Receiving Pounds 24 Machine Forming hours Assembling Parts Testing Tests Painting Gallons Packing and Pounds shipping eTextbook and Media Prepare a schedule assigning each activity's overhead cost pool to each product based on the use of cost drivers. (Round overhead cost per unit to 2 decimal places, e.g. 12.25 and cost assigned to 0 decimal places, e.g. 2,500.) Home Model Estimated Use of Activity Cost Pool Activity-Based Overhead Rates E Drivers Cost Assigned Receiving %24 Forming %24 Assembling 24 Testing Painting Packing and shipping Total costs %24 %24 %24 %24 %24 %24 %24 %24
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