Exercise 17-8 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 its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow Process Activity Overhead Cost Driver Quantity Components Changeover $ 456,000 Number of batches 810 Machining 305,000 Machine hours 8,230 Setups 234,000 Number of setups 40 $ 995,000 Finishing Welding $ 182,000 Welding hours 4,200 Inspecting 230,000 Number of inspections 905 Rework 61,000 Rework orders 200 5 473,000 Support Purchasing $133,000 Purchase orders 525 Providing space 32,500 Number of units 5,220 Providing utilities 67.000 Number of units 5,220 $ 232,500 Additional production information concerning its two product lines follows. Model 212 3,120 3,000 405 Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders Model 145 2,100 1,200 405 515 2,950 20 140 350 390 5,280 20 60 175 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 $290 for Model 145 and $120 for Model 212. 3. If the market price for Model 145 is $1,550 and the market price for Model 212 is $310, 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 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. (Round your intermediate calculations and per unit cost answers to 2 decimal places.) Show less Components department Finishing department 0 Support department Components department Finishing department Support department Model 145 Activity Driver Departmental OH Rate Total Overhead Cost 0 Components Finishing Support $ $ 0 0 Model 212 Activity Driver Departmental OH Rate Total Overhead Cost 0 Components Finishing Support $ $ 0 0 orders 350 60 175 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 $290 for Model 145 and $120 for Model 212 3. If the market price for Model 145 is $1,550 and the market price for Model 212 is $310, 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 $290 for Model 145 and $120 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 overh 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 $290 for and $120 for Model 212. 3. If the market price for Model 145 is $1,550 and the market price for Model 212 is $310, determine the profit or loss per un model. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 If the market price for Model 145 is $1,550 and the market price for Model 212 is $310, 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
