FireOut, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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. x (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 $18.78 for the home model and $26.20 for the commercial model. The direct labour cost is $20.00 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 Receiving Kilograms Machine hours Forming Assembling Number of parts Number of tests Litres Testing Painting Packing and shipping Kilograms Estimated Expected Use Overhead of Cost Drivers $70,610 151,200 391,100 51,700 54,110 783,560 $1,502,280 Expected Use of Drivers by Product Home Commercial 215,000 335,200 36,500 28,000 219,000 166,000 26,900 16,000 6,520 4,220 335,200 215,000 120,200 8,500 53,000 10,900 2,300 120,200 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.) Manufacturing Costs Direct materials Direct labour Overhead Total unit cost $ Home Model LINK TO TEXT LINK TO TEXT LINK TO TEXT Products Commercial Model 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 Receiving Forming Assembly Testing Painting Packing & shipping LINK TO TEXT $ $ $ $ $ $ $ LINK TO TEXT Est. MOH LINK TO TEXT Est. Usage $ ← ← Rate Cost Drivers per kilogram per machine hr per part per test per litre per kilogram Prepare a schedule assigning each activity s overhead cost pool to each product based on the use of cost drivers. (Round per unit cost to 2 decimal places, e.g. 15.25 and other answers to 0 decimal places e.g. 1525.) Activity-based overhead applied Receiving-kilograms Forming-machine hours Assembly-number of parts Testing-number of tests Painting-litres Packing and shipping-kilograms Total overhead applied Total units produced Per unit overhead cost $ LINK TO TEXT LINK TO TEXT LINK TO TEXT Home Commercial Prepare a schedule assigning each activity s overhead cost pool to each product based on the use of cost drivers. (Round per unit cost to 2 decimal places, e.g. 15.25 and other answers to 0 decimal places e.g. 1525.) Activity-based overhead applied Receiving-kilograms Forming-machine hours Assembly-number of parts Testing-number of tests Painting-litres Packing and shipping-kilograms Total overhead applied Total units produced Per unit overhead cost $ LINK TO TEXT LINK TO TEXT LINK TO TEXT Home Commercial Calculate the total cost per unit for each product under ABC. (Round answers to 2 decimal places, e.g. 15.25.) Per unit cost LINK TO TEXT LINK TO TEXT LINK TO TEXT Home Receiving Forming Assembling Testing Painting Packing and shipping Classify each of the activities as a value-added activity or a non-value-added activity. LINK TO TEXT LINK TO TEXT Commercial LINK TO TEXT 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. x (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 $18.78 for the home model and $26.20 for the commercial model. The direct labour cost is $20.00 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 Receiving Kilograms Machine hours Forming Assembling Number of parts Number of tests Litres Testing Painting Packing and shipping Kilograms Estimated Expected Use Overhead of Cost Drivers $70,610 151,200 391,100 51,700 54,110 783,560 $1,502,280 Expected Use of Drivers by Product Home Commercial 215,000 335,200 36,500 28,000 219,000 166,000 26,900 16,000 6,520 4,220 335,200 215,000 120,200 8,500 53,000 10,900 2,300 120,200 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.) Manufacturing Costs Direct materials Direct labour Overhead Total unit cost $ Home Model LINK TO TEXT LINK TO TEXT LINK TO TEXT Products Commercial Model 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 Receiving Forming Assembly Testing Painting Packing & shipping LINK TO TEXT $ $ $ $ $ $ $ LINK TO TEXT Est. MOH LINK TO TEXT Est. Usage $ ← ← Rate Cost Drivers per kilogram per machine hr per part per test per litre per kilogram Prepare a schedule assigning each activity s overhead cost pool to each product based on the use of cost drivers. (Round per unit cost to 2 decimal places, e.g. 15.25 and other answers to 0 decimal places e.g. 1525.) Activity-based overhead applied Receiving-kilograms Forming-machine hours Assembly-number of parts Testing-number of tests Painting-litres Packing and shipping-kilograms Total overhead applied Total units produced Per unit overhead cost $ LINK TO TEXT LINK TO TEXT LINK TO TEXT Home Commercial Prepare a schedule assigning each activity s overhead cost pool to each product based on the use of cost drivers. (Round per unit cost to 2 decimal places, e.g. 15.25 and other answers to 0 decimal places e.g. 1525.) Activity-based overhead applied Receiving-kilograms Forming-machine hours Assembly-number of parts Testing-number of tests Painting-litres Packing and shipping-kilograms Total overhead applied Total units produced Per unit overhead cost $ LINK TO TEXT LINK TO TEXT LINK TO TEXT Home Commercial Calculate the total cost per unit for each product under ABC. (Round answers to 2 decimal places, e.g. 15.25.) Per unit cost LINK TO TEXT LINK TO TEXT LINK TO TEXT Home Receiving Forming Assembling Testing Painting Packing and shipping Classify each of the activities as a value-added activity or a non-value-added activity. LINK TO TEXT LINK TO TEXT Commercial LINK TO TEXT
Expert Answer:
Related Book For
Managerial Accounting Tools for Business Decision Making
ISBN: 978-1119036432
7th edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Posted Date:
Students also viewed these accounting questions
-
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...
-
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...
-
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...
-
Taxpayer sold the following capital assets during the year: Asset # 1: $60,000 long-term capital gain Asset # 2: $10,000 long-term capital loss Asset # 3: $50,000 short-term capital gain Asset # 4:...
-
The number of cable TV networks has grown exponentially from 28 in 1980 to 565 in 2010 (Source: National Cable & Telecommunications Association). a) Using the data for 1980 and 2010, find the value...
-
Dry Quick (DQ) is a medium-sized, private manufacturing company located near Timmins, Ontario. DQ has a June 30 year-end. Your firm, Poivre & Sel (P&S), has recently been appointed as auditors forDQ....
-
Determine the probability mass function of \(X\) from the following cumulative distribution function: \[ F(x)=\left\{\begin{array}{lr} 0 & x. \] Figure 3.3 displays a plot of \(F(x)\). From the plot,...
-
Winter Lips produces a lip balm used for cold-weather sports. The balm is manufactured in a single processing department. No lip balm was in process on May 31, and Winter Lips started production on...
-
Buckley (2011) proposed the concept "global factory". What does the concept mean? What are the implications of the concept for international business? If you were to establish a firm of your own, how...
-
At the age of 25, Tasha Fellows obtained her university degree and entered the workforce. She sought the opinion of an investment advisor regarding a tax-free savings account (TFSA). The main...
-
Make-or-Buy Decision, Alternatives, Relevant Costs Each year, Basu Company produces 11,000 units of a component used in microwave ovens. An outside supplier has offered to supply the part for $1.24....
-
How has the growth of the Internet affected the problem of transactions costs and information costs in the financial system?
-
Who may perform an audit for a public corporation?
-
Under the common law, how long a period of notice must be given to terminate a yearly tenancy? What is the meaning of clear as it relates to notice?
-
What standard of care and skill is expected of corporate directors in relation to environmental offences?
-
Does the principle of limited liability protect a director from criminal liability in the course of performing her duties?
-
Sandhill Corporation began the month of May with $68000 of obligations and $197000 of economic resources. Stockholders' equity increased by $26000 during May because the company paid $120000 of...
-
A Bloomberg Businessweek subscriber study asked, In the past 12 months, when traveling for business, what type of airline ticket did you purchase most often? A second question asked if the type of...
-
Kirk Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Spock, Uhura, and Sulu. Each of these products can be sold as...
-
You have been given the following information about the production of Usher Co., and are asked to provide the plant manager with information for a meeting with the vice president of operations....
-
Using the data in E3-15, assume Santana Mortgage Company uses the FIFO method. Also, assume that the applications in process on September 1 were 100% complete as to materials (forms) and 40% complete...
-
Can the displacement of a persons trip be zero, yet the distance involved in the trip is nonzero? How about the reverse situation? Explain.
-
An object traveling at a constant velocity vo experiences a constant acceleration in the same direction for a period of time t. Then an acceleration of equal magnitude is experienced in the opposite...
-
You are told that a person has walked 750 m. What can you safely say about the persons final position relative to the starting point?
Study smarter with the SolutionInn App