Exercise 17-7 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 their components department. The mechanical systems are combined with the housing assembly in department. The activities, costs, drivers associated with these two manufacturing processes and the production support process follow. Process Activity Overhead Cost Quantity Driver Components Changeover 500,000 Number of batches 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 Additional production information concerning its two product lines follows. Model 145 odel 212 Units produced 1,500 3,500 Welding hours 2,200 Batches 400 Number of inspections 300 Machine hours 1,800 4,200 Setups 60 60 Rework orders 160 140 Purchase orders 300