Exercise 04-9 Using departmental overhead rates to assess prices LO P2 ook 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 $ 500,000 Number of batches 800 Machining 279,000 Machine hours 6,000 Setups 225,000 Number of setups 120 $1,004,000 Finishing Welding $ 180,300 Welding hours 3,000 Inspecting 210,000 Number of inspections 700 Rework 75,000 Rework orders 300 $ 465,300 Support Purchasing 135,000 Purchase orders 450 Providing space 32,000 Number of units 5,000 Providing utilities 65,000 Number of units 5,000 $ 232,000 Hint $ Print eferences Additional production information concerning its two product lines follows. Model 145 Model 212 Units produced 1,500 3,500 Welding hours 800 2,200 Batches 400 400 Number of inspections 400 300 Machine hours 1,800 4,200 Setups 60 60 Rework orders 160 140 Purchase orders 300 150 Required: 1. Determine departmental overhead rates and compute the overhead cost per unit for each product line. Base your overhead assignment for the components department on machine hours. Use welding hours to assign overhead costs to the finishing department. Assign costs to the support department based on number of purchase orders. 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 $820 and the market price for Model 212 is $480, determine the profit or loss per unit for each model. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine departmental overhead rates and compute the overhead cost per unit for each product line. Base your overhead assignment for the components department on machine hours. Use welding hours to assign overhead costs to the finishing department. Assign costs to the support department based on number of purchase orders. (Round your intermediate calculations and per unit cost answers to 2 decimal places.) Show less Components department Finishing department 0 Support department Activity Driver Departmental OH Rate Total Overhead Cost Model 145 0 Support department 0 Model 145 Activity Driver Departmental OH Rate Total Overhead Cost $ 0 Components Finishing Support $ 0 0 + ces Model 212 Activity Driver Departmental OH Rate Total Overhead Cost $ 0 Components Finishing Support $ 0 0 Requiel 1 Required 2 Required: 1. Determine departmental overhead rates and compute the overhead cost per unit for each pro assignment for the components department on machine hours. Use welding hours to assign ov department. Assign costs to the support department based on number of purchase orders. 2. Determine the total cost per unit for each product line if the direct labor and direct materials and $180 for Model 212. 3. If the market price for Model 145 is $820 and the market price for Model 212 is $480, determi model. 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 p 145 and $180 for Model 212. (Round your intermediate calculations and cost per unit answers to 2 d Model 145 Model 212 Materials and Labor per unit Overhead cost per unit Total cost per unit
