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 × (54,000 + 10,200). Estimated annual manufacturing overhead is $1,588,566. Thus, the predetermined overhead rate is $16.50 or ($1,588,566 ÷ 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 155,050 35,000 27,000 8,000 Assembling Number of parts 412,300 217,000 165,000 52,000 Testing Number of tests 46,920 25,500 15,500 10,000 Painting Gallons 63,096 5,258 3,680 1,578 Packing and shipping Pounds 824,100 335,000 215,000 120,000 $1,588,566 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 Activity-Base Overhead Ra Estimated Cost Pool Overhead Use of Cost Drivers Receiving 2$ Pounds $ Machine Forming 2$ hours Assembling Parts $

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 × (54,000 + 10,200). Estimated annual manufacturing overhead is $1,588,566. Thus, the predetermined overhead rate is $16.50 or ($1,588,566 ÷ 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 155,050 35,000 27,000 8,000 Assembling Number of parts 412,300 217,000 165,000 52,000 Testing Number of tests 46,920 25,500 15,500 10,000 Painting Gallons 63,096 5,258 3,680 1,578 Packing and shipping Pounds 824,100 335,000 215,000 120,000 $1,588,566 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 Activity-Base Overhead Ra Estimated Cost Pool Overhead Use of Cost Drivers Receiving 2$ Pounds $ Machine Forming 2$ hours Assembling Parts $

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 25P: Taylor Company produces two industrial cleansers that use the same liquid chemical input: Pocolimpio...

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