Question

FireOut, 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-litre cylinder that holds 2.50 kilograms of multi-purpose dry chemical at 480 PSI (pounds per square inch). The commercial model is a low-volume (10,200 units), two-litre cylinder that holds 10 kilograms of multi-purpose dry chemical at 390 PSI. Both products require 1.50 hours of direct labour for completion. Therefore, total annual direct labour hours are 96,300 or [1.50 hrs. × (54,000 + 10,200)]. Expected annual manufacturing overhead is $1,502,280. Thus, the predetermined overhead rate is $15.60 or ($1,502,280 ÷ 96,300) per direct labour hour. The direct materials cost per unit is $18.64 for the home model and $26.66 for the commercial model. The direct labour cost is $20.20 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: Activity Cost Pools Cost Drivers Estimated Overhead Expected Use of Cost Drivers Expected Use of Drivers by Product Home Commercial Receiving Kilograms $70,450 337,000 216,000 121,000 Forming Machine hours 151,000 35,200 27,000 8,200 Assembling Number of parts 390,800 219,000 167,000 52,000 Testing Number of tests 51,100 26,000 16,000 10,000 Painting Litres 54,310 6,260 4,260 2,000 Packing and shipping Kilograms 784,620 337,000 216,000 121,000 $1,502,280

Under traditional product costing, calculate the total unit cost of each product. Prepare a simple comparative schedule of the individual costs by product. (Round answers to 2 decimal places, e.g. 15.25.) Products Manufacturing Costs Home Model Commercial Model Direct materials $ $ Direct labour Overhead    Total unit cost $ $

Under ABC, prepare a schedule showing the calculations of the activity-based overhead rates (per cost driver). (Round rate per cost driver to 2 decimal places, e.g. 15.25 and other answers to 0 decimal places e.g. 1525.) Cost Pool Est. MOH Est. Usage Rate Cost Drivers Receiving $ $ per kilogram Forming $ $ per machine hr Assembly $ $ per part Testing $ $ per test Painting $ $ per litre Packing & shipping $ $ per kilogram Total $ Fill In