Exercise 17-9 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 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. Process Activity Components Changeover Machining Setups Driver Number of batches Machine hours Number of setups Quantity 750 8,580 100 Pinishing Welding Inspecting Rework Overhead Coat $ 466,000 305,000 232,000 $1,003,000 $ 188,000 229,000 61,500 $ 478,500 $ 145,000 35,000 66,000 $ 246,000 Welding hours Number of inspections Rework orders 5,100 900 240 Support Purchasing Providing space Providing utilities Purchase orders Number of units Number of units 525 4, 420 4,420 Additional production information concerning its two product lines follows. Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders Model 145 1,400 1,600 375 510 3,250 50 160 350 Model 212 3,020 3,500 375 390 5,330 50 80 175 Setups Rework orders Purchase orders 50 160 350 50 80 175 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 $300 for Model 145 and $170 for Model 212. 3. If the market price for Model 145 is $2,075 and the market price for Model 212 is $320, determine the profit or loss per unit for each model. --- Components department Finishing department Support department Model 145 Activity Driver Departmental OH Rate Total Overhead Cost Components Finishing Support Model 212 Activity Drive Departmental OH Rate Total Overhead Cost Components Finishing Support 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 $300 for Model and $170 for Model 212. 3. If the market price for Model 145 is $2,075 and the market price for Model 212 is $320, determine the profit or loss per unit for 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 $300 for Model 145 and $170 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 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 $300 for Model 145 and $170 for Model 212. 3. If the market price for Model 145 is $2,075 and the market price for Model 212 is $320, 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 If the market price for Model 145 is $2,075 and the market price for Model 212 is $320, 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 (los) per unit
