Vaughn 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)]. Estimated annual manufacturing overhead is $ 1,574,800. Thus, the predetermined overhead rate is $ 16.35 or ($ 1,574,800 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 companys managers identified six activity cost pools and related cost drivers and accumulated overhead by cost pool as follows.

										Use of Drivers by Product
Activity Cost Pools		Cost Drivers		Estimated Overhead			Estimated Use of Cost Drivers			Home		Commercial
Receiving		Pounds		$ 87,100			335,000			215,000		120,000
Forming		Machine hours		151,900			35,000			27,000		8,000
Assembling		Number of parts		405,790			217,000			165,000		52,000
Testing		Number of tests		49,980			25,500			15,500		10,000
Painting		Gallons		52,580			5,258			3,680		1,578
Packing and shipping		Pounds		827,450			335,000			215,000		120,000
				$ 1,574,800

(a)

Under traditional product costing, compute the total unit cost of each product. (Round answers to 2 decimal places, e.g. 12.50.)

		Home Model		Commercial Model
Total unit cost		$ enter a dollar amount rounded to 2 decimal places		$ enter a dollar amount rounded to 2 decimal places

b)under abc prepare a schedule showing the computations of activity based over head rates (per cost driver)

c)Prepare a schedule assigning each activity's overhead cost pool to each product based on the use of cost drivers. (include computations of overhead cost per unit, rounding to the nearest 2 decimal places)

d) compute the total cost per unit for each product under ABC

e) classify each of the activities as a value added activity or a non value added activity.

f) comment on (1) the comparative overhead cost per unit for the two products under ABC, and (2) the comparative total costs per unit under the traditional costing and ABC.