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Exercise 17-7 Using the plantwide overhead rate to assess prices LO P1 Way Cool produces two different models of air conditioners. The company produces
Exercise 17-7 Using the plantwide overhead rate to assess prices LO P1 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 its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations and round "Cost per unit and OH rate" answers to 2 decimal places.) Process Activity Overhead Cost Driver Components Changeover Machining $ 500,000 Number of batches Setups 279,000 225,000 Machine hours Number of setups Quantity 800 6,000 120 $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 Providing space Providing utilities $ 135,000 Purchase orders 450 32,000 65,000 Number of units 5,000 Number of units 5,000 $ 232,000 Additional production information concerning its two product lines follows. Units produced Model 145 Model 212 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
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