Exercise 4-8 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 follovw Process Activity Components Changeover Overhead Cost Driver $ 454,000 308,000 232,000 994,000 Number of batches Machine hours Number of setups Quantity 850 8,570 80 Machining Setups Finishing Welding 186,000 225,000 60,500 471,500 Welding hours Number of inspections Rework orders 4,900 830 220 Inspecting Rework Purchasing Providing space Providing utilities Purchase orders Number of units Number of units 513 5,210 5,210 Support 143,000 37,000 66,000 246,000 Additional production information concerning its two product lines follows. Model 145 Model 212 Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders 2,100 800 425 520 3,250 40 140 342 3,110 4,100 425 310 5,320 40 80 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 $230 for Model 145 and $17O for Model 212. 3. If the market price for Model 145 is $1,700 and the market price for Model 212 is $250, determine the profit or loss per unit for each model. Complete this question by entering your answers in the tabs below. Required 1Required 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 lessA Components department Finishing department Support department Activity Departmental Total Overhead Cost Model 145 Driver OH Rate Components Finishing Support Activity Departmental Total Overhead Cost Model 212 Driver OH Rate Components Finishing Support Required 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 $230 for Model 45 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 KRequired 1 Required 3 > If the market price for Model 145 is $1,700 and the market price for Model 212 is $250, 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
