Problem -

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 $18.42 for the home model and $26.90 for the commercial model. The direct labour cost is $19.20 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:

Please see attached for more information.

Under traditional product costing, calculate the total unit cost of each product. Prepare a simple comparative schedule of the individual costs by product.

Calculate the total cost per unit for each product under ABC.

Prepare a schedule assigning each activity's overhead cost pool to each product based on the use of cost drivers.

Under ABC, prepare a schedule showing the calculations of the activity-based overhead rates (per cost driver).