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
$1,582,000. Thus, the predetermined overhead rate is $16.43 or
($1,582,000 ÷ 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:
Expected Use of |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|
Activity Cost Pools |
Cost Drivers |
Estimated Overhead |
Expected Use of |
Home |
Commercial |
|||||
Receiving | Pounds |
$88,500 |
335,000 |
215,000 |
120,000 |
|||||
Forming | Machine hours |
153,000 |
35,000 |
27,000 |
8,000 |
|||||
Assembling | Number of parts |
410,000 |
217,000 |
165,000 |
52,000 |
|||||
Testing | Number of tests |
53,000 |
25,500 |
15,500 |
10,000 |
|||||
Painting | Gallons |
57,500 |
5,258 |
3,680 |
1,578 |
|||||
Packing and shipping | Pounds |
820,000 |
335,000 |
215,000 |
120,000 |
|||||
$1,582,000 |
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 |
Expected |
Activity-Based |
||||||
---|---|---|---|---|---|---|---|---|---|
Receiving |
$enter a dollar amount |
enter an amount of pounds |
Pounds |
$enter a dollar amount per pound rounded to 2 decimal places |
per pound | ||||
Forming |
enter a dollar amount |
enter a number of machine hours |
Machine hours |
$enter a dollar amount per machine hour rounded to 2 decimal places |
per machine hour | ||||
Assembling |
enter a dollar amount |
enter a number of parts |
Parts |
$enter a dollar amount per part rounded to 2 decimal places |
per part | ||||
Testing |
enter a dollar amount |
enter a number of tests |
Tests |
$enter a dollar amount per test rounded to 2 decimal places |
per test | ||||
Painting |
enter a dollar amount |
enter an amount of gallons |
Gallons |
$enter a dollar amount per gallon rounded to 2 decimal places |
per gallon | ||||
Packing and shipping | enter a dollar amount |
enter an amount of pounds |
Pounds |
$enter a dollar amount per pound rounded to 2 decimal places |
per pound | ||||
$enter a total amount |
Schedule showing the computations of the activity-based overhead rates
Activity Cost Pool |
Estimated Overheads $ |
Expected use of Cost Drivers |
Activity Based Overhead Rate = Estimated Overheads $ / Expected use of Cost Drivers |
Receiving |
88,500.00 |
3,35,000 Pounds |
$0.26 per pound |
Forming |
1,53,000.00 |
35,000 Machine Hours |
$4.37 per machine hour |
Assembling |
4,10,000.00 |
2,17,000 Parts |
$1.89 per part |
Testing |
53,000.00 |
25,500 Tests |
$2.08 per test |
Painting |
57,500.00 |
5,258 Gallons |
$10.94 per gallon |
Packing and Shipping |
8,20,000.00 |
3,35,000 Pounds |
$2.45 per pound |
15,82,000.00 |
Combat Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a...
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...
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...
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...
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...
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...
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...
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,...
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...
Question 1 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....
Problem 17-IA 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....