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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 Components Changeover Machining Setups Driver Number of batches Machine hours Number of setups Quantity 810 8, 430 220 Finishing Welding Inspecting Rework Overhead Cost $ 481,950 391,995 399, 300 $1,273, 245 $ 392,940 286, 350 46,750 $ 726,040 $ 183,675 30, 400 134,030 $ 348, 105 Welding hours Number of inspections Rework orders 5,900 830 170 Support 465 Purchasing Providing space Providing utilities Purchase orders Number of units Number of units 8,700 8,700 Additional production information concerning its two product lines follows. Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders Model 145 2,900 2,600 405 470 3,150 110 80 310 Model 212 5,800 3,300 405 360 5,280 110 90 155 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 $250 for Model 145 and $114 for Model 212. 3. If the market price for Model 145 is $637.33 and the market price for Model 212 is $325.67, determine the profit or loss per unit for each model. Required 1 Required 2 Required 3 Using ABC, compute the overhead cost per unit for each product line. (Round your final answers to 2 decimal places.) Activity Expected Costs Expected Activity Activity Rate $ 810 Number of batches Components Changeover Machining Setups 481,950 391,995 399,300 8,430 Machine hours 220 Setups Finishing 392,940 286,350 46,750 5,900 Welding hours 830 Inspections 170 Rework orders Welding Inspecting Rework Support Purchasing Providing space and utilities $ 183,675 164,430 465 Purchase orders 8,700 Units Total overhead cost Total units produced Overhead cost per unit Model 145 Activity driver incurred Overhead assigned Model 212 Activity driver Overhead incurred assigned Required 1 Required 2 Required 3 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 $114 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 $637.33 and the market price for Model 212 is $325.67, 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
