Exercise 04-11 Using ABC to assess prices LO P3 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 S561, 150 Number of batches 870 Machining 382, 169 Machine hours 8,290 Setups 189,000 Number of setups 100 $1, 132,319 Finishing Welding $ 344,760 Welding hours 5, 100 Inspecting 260,400 Number of inspections 840 Rework 43,200 Rework orders 180 $ 648, 360 Support Purchasing $ 166,500 Purchase orders 555 Provit space 31,600 Number of units 4,200 Providing utilities 47,780 Number of units 4, 200 $ 245, 880 Additional production information concerning its two product lines follows. Model 145 Model 212 Additional production information concerning its two product lines follows. Model 145 Units produced Model 212 1,490 2,800 Welding hours 2,000 3, 100 Batches 435 435 Number of inspections 470 370 Machine hours 2,950 5, 340 Setups 50 Rework orders 130 56 Purchase orders 370 185 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 $240 for Model 145 and $111 for Model 212 3. If the market price for Model 145 $926.86 and the market price for Model 212 is $492.11, determine the profit or loss per unit for each model Complete this question by entering your answers in the tabs below. Activity Expected Costs Expected Activity Activity Rate Activity driver incurred $ 561,150 382,169 189,000 870 Number of batches 8,290 Machine hours 100 Setups Components Changeover Machining Setups Finishing Welding Inspecting Rework Support Purchasing Providing space and utilities $ 344,760 260.400 43.200 5.100 Welding hours 840 Inspections 180 Rework orders $ 166,500 79.380 555 Purchase orders 4,200 Units Total Overhead cost Total units produced Overhead cost per unit Required 2 > tity Activity Rate Model 145 Activity driver Overhead incurred assigned Model 212 Activity driver Overhead incurred assigned of balches hours sours ns eders orders $ 0 Total overhead cost Total units produced Overhead cost per unit Required 2 > Complete this question by entering your answers in the tabs below. 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 $240 for Model 1145 and $111 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 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 If the market price for Model 145 is $926.86 and the market price for Model 212 is $492.11, 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 (los) per unit
