blem 17-1A Combat Fire, Inc. manufactures steel cylinders and nozzles for two mo
ID: 2537442 • Letter: B
Question
blem 17-1A
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)]. Expected annual manufacturing overhead is $1,584,280. Thus, the predetermined overhead rate is $16.45 or ($1,584,280 ÷ 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.
Expected Use of Drivers by Product Expected Use of Cost Drivers Activity Cost Pools Receiving Forming Assembling Testing Painting Packing and shipping Cost Drivers Pounds Machine hours Number of parts Number of tests Gallons Pounds Estimated Overhead Commercial 120,000 8,000 52,000 10,000 1,578 120,000 Home $80,400 150,500 412,300 51,000 52,580 837,500 $1,584,280 335,000 215,000 35,000 27,000 217,000 165,000 25,500 15,500 3,680 335,000 215,000 5,258 xYour answer is incorrect. Try again Under traditional product costing, compute the total unit cost of each product. (Round answers to 2 decimal places, e.g. 12.25.) Home Model Commercial Model ...- T Total unit costExplanation / Answer
1. Traditional Costing:
2. Activity Based Overhead Rate:
3. Achedule=Activity overhead cost pool
4. Unit Cost based on Activities:
Home Commercial Working Direct Material 18.5 26.5 Given Direct Labor 19 19 Given Overheads 16.45 16.45 1584280/96300 Hours Total Unit Cost 53.95 61.95Related Questions
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