Exercise 17-11 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 Components Changeover Machining Setups Driver Number of batches Machine hours Number of setups Quantity 930 8,520 100 Finishing Welding Inspecting Rework Overhead Cost $ 599,850 401,292 186,500 $1,187,642 $ 272,950 288,100 30,100 $ 591,150 $ 186,320 30,900 89,430 $ 306,650 Welding hours Number of inspections Rework orders 5,300 860 140 Support Purchasing Providing space Providing utilities Purchase orders Number of units Number of units 548 6,300 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 1,800 465 480 3,250 50 80 365 Model 212 4,200 3,500 465 380 5,270 50 60 183 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 $115 for Model 212. 3. If the market price for Model 145 is $667.85 and the market price for Model 212 is $378.25, 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 $ 599,850 401,292 186,500 930 Number of batches 8,520 Machine hours 100 Setups Components Changeover Machining Setups Finishing Welding Inspecting Rework Support Purchasing Providing space and utilities $ 272,950 288,100 30,100 5,300 Welding hours 860 Inspections 140 Rework orders $ 186,320 120,330 548 Purchase orders 6,300 Units Total overhead cost $ 0 $ 0 Total units produced Overhead cost per unit 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 $115 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 $667.85 and the market price for Model 212 is $378.25, 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