Exercise 04-9 Using departmental overhead rates to assess prices LO P2 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 Quantity 730 7,850 220 Finishing Welding Inspecting Rework Overhead Cost Driver $ 458,000 Number of batches 306,000 Machine hours 231,000 Number of setups $ 995,000 $ 186,000 Welding hours 232,000 Number of inspections 62,500 Rework orders $ 480,500 $ 133,000 Purchase orders 36,500 Number of units 61,000 Number of units $ 230, 500 6,100 855 240 Support Purchasing Providing space Providing utilities 537 5,260 5,260 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 2,200 2,400 365 495 2,550 110 170 358 Model 212 3,060 3,700 365 360 5,300 110 70 179 SIUVIOSSA $ 218.78 per direct labor hour Components department Overhead costs Machine hours Finishing department $ 1,678,050 7,670 $ $ 0.42 2,270 5,400 Support department Model 145 Activity Driver Departmental OH Rate Total Overhead Cost Components Finishing Support Model 212 Activity Driver Departmental OH Rate Total Overhead Cost Components Finishing Support 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 $310 for Model 145 and $150 for Model 212. 3. If the market price for Model 145 is $1,175 and the market price for Model 212 is $260, 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 the total cost per unit for each product line if the direct labor and direct materials costs per unit are $310 for Model 145 and $150 for Model 212. (Round your intermediate calculations and cost per unit answers to 2 decimal places.) Model 145 Model 212 Materials and Labor per unit Overhead cost per unit Total cost per unit 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 $310 for Model 145 and $150 for Model 212. 3. If the market price for Model 145 is $1,175 and the market price for Model 212 is $260, determine the profit or loss per unit for each model. Complete this question by entering your answers in the tabs below. UUUUUUUUUUUUUUUUUUUUUUU Required 1 Required 2 Required 3 --- If the market price for Model 145 is $1,175 and the market price for Model 212 is $260, determine the profit or loss per unit for each model. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations and final answers to 2 decimal places.) Model 145 Model 212 Market price per unit Cost per unit Profit (loss) per unit