Exercise 04-11 Using ABC to assess prices LO P3 Way Cool produces two different models of alr 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 Components Activity Changeover Machining Setups Driver Number of batches Machine hours Number of setups Quantity 830 8,150 160 Finishing Welding Inspecting Rework Overhead Cost $ 560,25 371, 642 292.see $1,224,690 $ 309,199 303,400 47,320 $ 659,890 $ 183,582 31,200 89.139 $ 303,910 Welding hours Number of inspections Rework orders 4,9ee 820 220 Support 548 Purchasing Providing space Providing utilities Purchase orders Number of units Number of units 6, 3ee 6,300 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 2,100 1, eee 415 460 2,850 89 160 365 Model 212 4.200 3,900 415 360 5, 3ee se 183 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 $119 for Model 212. 3. If the market price for Model 145 is $670.48 and the market price for Model 212 is $405.66, 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.) Model 145 Activity driver Overhead incurred assigned Model 212 Activity driver Overhead incurred assigned Activity Expected Costs Expected Activity Activity Rate Components Changeover Machining Setups 560.250 371,640 292,800 830 Number of batches S 8,150 Machine hours $ 160 Setups is 6 75.00 per batch 45.60 per machine hour 1.830.00 per setup $ Finishing Welding Inspecting Rework 309,190 303,400 47,300 4,900 Welding hours 820 Inspections 220 Rework orders 63.10 per welding hour 370.00 per inspection 215.00 per rework order $ Support Purchasing Providing space and utilities 183,580 120.330 548 Purchase orders 6,300 Units $ $ 335.00 per purchase order 19.10 per unit Total overhead cost Total units produced Overhead cost per unit Required 1 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 $200 for Model 145 and $119 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 Required 1 Required 2 Required 3 If the market price for Model 145 is $670.48 and the market price for Model 212 is $405.66, 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
