Exercise 17-8 Using the plantwide overhead rate to assess prices LO P1
Exercise 17-8 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 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. (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 Components Changeover Machining Setups Driver Number of batches Machine hours Number of setups Quantity 898 7,720 160 Finishing Welding Inspecting Rework Overhead Cost $ 454,588 380, 200 228, eee $ 982,780 $ 188,988 228,000 61,856 $ 470,750 $ 135,500 30,980 60,410 $ 226, 710 Welding hours Number of inspections Rework orders 5,188 780 200 Support Purchasing Providing space Providing utilities Purchase order's Number of units Number of units 518 4,888 4,880 Additional production Information concerning its two product lines follows. Model 145 1,600 2,200 445 ses Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders Model 212 3,280 2,900 445 275 5,400 88 180 173 2,320 80 100 345 Required: S 1. Using a plantwide overhead rate based on machine hours, compute the overhead cost per unit for each product line. Overhead costs 1.680,180 o per machine hour Machine hours 2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $270 for Model 145 and $140 for Model 212 Activity Driver Plantwide OH rate Units Produced OH Cost per unit Overhead Assigned Model 145 Model 212 Total Overhead Cost $ $ 0 0 Model 145 Model 212 0 3. If the market price for Model 145 is 9734 and the market price for Model 212 is $460, determine the profit or loss per unit for each model. Model 145 Model 212 Market price Smythe Co. makes furniture. The following data are taken from its production plans for the year. Direct labor costs Hazardous waste disposal costs $5,298,888 620,eee Expected production Direct labor hours required Hazardous waste disposed Chairs 2es,eee units 258,00 DLH 508 pounds Tables 16,800 units 16,208 DLH 1,608 pounds Required: 1. Determine the hazardous waste disposal cost per unit for chairs and for tables if costs are assigned using a single plantwide overhead rate based on direct labor hours. 0 Product Activity Driver Total Overhead Cost Units Produced OH $ per direct labor hour 0.00 OH Cost per unit Chairs Tables $ $ 0 0 0 0 0.00 2. Determine hazardous waste disposal costs per unit for chairs and for tables if costs are assigned based on the number of pounds disposed of 0 Product Activity Driver Total Overhead Cost Units Produced OH Cost per unit OH S per pound $ 0.00 S $ 0 Chairs Tables 0 0.00 $ 0 0
