Combat Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a...

Under traditional product costing, compute the total unit cost of each product. Home Model Commercial Model Total unit cost $62.15 $70.15 Under ABC, prepare a schedule showing the computations of the activity-based overhead rates (per cost driver). Activity Cost Pool Estimated Overhead Estimated Use of Cost Drivers $87,100 152,950 35,000 Machine Receiving Forming Assembling Testing Painting Packing and shipping Activity-Based Overhead Rate $0.26 per pound o per machine hour 1.89 per part 2.08 per test 11.00 per gallon hours 217,000 Parts 25,500 Tests 5,258 Gallons 410,130 53,040 57,838 820,750 335,000 pounds 2.45 per pound

Prepare a schedule assigning each activity's overhead cost pool to each product based on the use of cost drivers. Home Model Commercial Model Estimated Use of Activity-Based Estimated Use Cost Assigned Activity-Based Activity Cost Pool Cost Assigned Cost Drivers Overhead Rates of Cost Drivers Overhead Rates Receiving 215,000 $0.26 $55,900 120,000 $0.26 $31,200 Forming 27,000 4.37 117,990 8,000 4.37 34,960 Assembling 165,000 1.89 311,850 52,000 1.89 98,280 15,500 2.08 32,240 10,000 2.08 20,800 Painting 3,680 11.00 40,480 1,578 11.00 17,358 Packing and 215,000 2.45 526,750 120,000 2.45 294,000 shipping Total costs assigned (a) $1,085,210 $496,598 Units produced (b) 54,000 10,200 Overhead cost per unit [(a) = (b)] $20.10 $48.69 Testing Compute the total cost per unit for each product under ABC. Home Model Commercial Model Total cost per unit $57.60 $94.19

Classify each of the activities as a value-added activity or a non-value- added activity. Activity Receiving Non-value-added Forming Value-added Assembling Value-added Testing Non-value-added Painting Value-added Packing and shipping Value-added Explanation: Under traditional product costing, compute the total unit cost of each product. Products Commercial Home Model Model Direct materials $18.50 $26.50 Direct labor 19.00 19.00 Overhead ($16.43 per direct labor hour * 1.5 hours) | 24.65 Total unit cost $62.15 $70.15 24.65)

Compute the total cost per unit for each product under ABC. Products Commercial Home Model Model Direct materials $18.50 $26.50 Direct labor 19.00 19.00 Overhead 20.10 48.69 Total unit cost $57.60 $94.19