4.4 Way Cool produces two different models of air conditioners. The company produces the mechanical systems in its 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. Process Activity Overhead Cost Driver Quantity Components Changeover $ 505,750 Number of batches 850 Machining 371,265 Machine hours 7,950 Setups 418,000 Number of setups 220 $ 1,295,015 Finishing Welding $ 306,500 Welding hours 5,000 Inspecting 280,500 Number of inspections 825 Rework 37,400 Rework orders 170 $ 624,400 Support Purchasing $ 156,090 Purchase orders 473 Providing space 30,400 Number of units 4,500 Providing utilities 56,000 Number of units 4,500 $ 242,490 Additional production information concerning its two product lines follows. Model 145 Model 212 Units produced 1,500 3,000 Welding hours 1,000 4,000 Batches 425 425 Number of inspections 475 350 Machine hours 2,650 5,300 Setups 110 110 Rework orders 90 80 Purchase orders 315 158 Required: 1. Using ABC, 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 $200 for Model 145 and $117 for Model 212. 3. If the market price for Model 145 is $841.35 and the market price for Model 212 is $517.63, determine the profit or loss per unit for each model.

Using ABC, compute the overhead cost per unit for each product line. (Round your final answers to 2 decimal places.)

						Model 145		Model 212
Activity	Expected Costs	Expected Activity		Activity Rate		Activity driver incurred	Overhead assigned	Activity driver incurred	Overhead assigned
Components
Changeover	$505,750	850	Number of batches
Machining	371,265	7,950	Machine hours
Setups	418,000	220	Setups
Finishing
Welding	$306,500	5,000	Welding hours
Inspecting	280,500	825	Inspections
Rework	37,400	170	Rework orders
Support
Purchasing	$156,090	473	Purchase orders
Providing space and utilities	86,400	4,500	Units
					Total overhead cost		$0		$0
					Total units produced
					Overhead cost per unit

• Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $200 for Model 145 and $117 for Model 212. (Round your final answers to 2 decimal places.)

  	Model 145	Model 212
  Materials and Labor per unit
  Overhead cost per unit
  Total cost per unit

  If the market price for Model 145 is $841.35 and the market price for Model 212 is $517.63, determine the profit or loss per unit for each model. (Round your final answers to 2 decimal places.)

  	Model 145	Model 212
  Price per unit
  Cost per unit
  Profit (loss) per unit

• Consider the following data for two products of Gitano Manufacturing. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations and "OH rate and cost per unit" answers to 2 decimal places.)

  	Product A	Product B
  Number of units produced	11,000 units	1,700 units
  Direct labor cost (@ $24 per DLH)	0.15 DLH per unit	0.26 DLH per unit
  Direct materials cost	$ 2.00 per unit	$ 3.10 per unit

  Activity	Overhead costs
  Machine setup		$	29,260
  Materials handling			56,000
  Quality control inspections			103,020
  		$	188,280

  Required: