Real Cool produces two different models of air conditioners. The company produces the mechanical systems in their components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow.

Additional production information concerning its two product lines follows.

Required
1. Using a plantwide overhead rate based on machine hours, compute the overhead cost per unit for each product line.
2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $250 for Model 145 and $180 for Model 212.
3. If the market price for Model 145 is $800 and the market price for Model 212 is $470, determine the profit or loss per unit for each model. Comment on theresults.

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Process Activity Overhead Cost Driver Quantity Components Changeover Number of batches Machine hours Machining Setups setups $1,004,000 $ 180,300Welding hours Finishing Welding Number of inspections Rework orders Purchasing Providing space Providing utilities Support Purchase orders units Number of units 65,000 Model 145 Model 212 Units produced.. Welding hours . 1,500 800 400 400 1,800 60 160 300 3,500 2,200 400 300 Number of inspections Machine hours Setups Rework orders. Purchase orders . . .. 4,200 60 140 150