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	Quantity
Components	Changeover		$	456,500		Number of batches	850
	Machining			301,600		Machine hours	7,700
	Setups			229,000		Number of setups	40
			$	987,100
Finishing	Welding		$	182,200		Welding hours	4,100
	Inspecting			222,000		Number of inspections	790
	Rework			60,550		Rework orders	230
			$	464,750
Support	Purchasing		$	135,500		Purchase orders	533
	Providing space			31,800		Number of units	4,200
	Providing utilities			60,510		Number of units	4,200
			$	227,810

Additional production information concerning its two product lines follows.

	Model 145			Model 212
Units produced		1,400			2,800
Welding hours		800			3,300
Batches		425			425
Number of inspections		495			295
Machine hours		2,300			5,400
Setups		20			20
Rework orders		170			60
Purchase orders		355			178

Required:

indicated with a minus sign. Round your intermediate calculations and round "Cost per unit and OH rate" answers to 2 decimal places.) Process Activity Components Changeover Machining Setups Quantity 850 7,700 40 points Skipped Finishing Welding Inspecting Rework Overhead Cost Driver $ 456,500 Number of batches 301,600 Machine hours 229,000 Number of setups $ 987,100 $ 182,200 Welding hours 222,000 Number of inspections 60,550 Rework orders $ 464,750 $ 135,500 Purchase orders 31,800 Number of units 60,510 Number of units $ 227,810 4,100 790 230 eBook Support Hint Purchasing Providing space Providing utilities 533 4,200 4,200 Print Additional production information concerning its two product lines follows. Print References Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders . Model 145 1.400 800 425 495 2,300 20 170 355 Model 212 2,800 3. 300 425 295 5; 400 20 60 178 References References References Required: References References 1. Using a plantwide overhead rate based on machine hours, compute the overhead cost per unit for each product line. References 2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $240 for Model 145 and $130 for Model 212. References Activity Driver Plantwide OH rate Total Overhead Cost Units Produced OH Cost per unit Overhead Assigned Model 145 Model 212 Model 145 Model 212 3. If the market price for Model 145 is $741 and the market price for Model 212 is $470, determine the profit or loss per unit for each model. Model 145 Model 212 Market price