Exercise 4-9 Using ABC to assess prices LO P3 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. Quantity 890 PROCESS Activity Components Changeover Machining Setups Driver Number of batches Machine hours Number of setups 7.800 100 Finishing Welding Inspecting Rework Overhead Cost $ 609,550 357.240 182,000 $1,148,890 $ 312,360 321,475 53.300 $ 687.135 177.375 31. 100 127,660 336, 135 Welding hours Number of inspections Rework orders 5.700 835 260 Support Purchasing Providing space Providing utilities Purchase orders Number of units Number of units 473 8.400 8.400 Additional production information concerning its two product lines follows. odel 145 2.800 1,800 445 todel 212 5,600 3,900 Units produced Welding hours Batches Number of inspection Machine hours Setupa Rework Orders Purchase orders Required: 1. Using ABC, compute the overhead cost per unit for each product line. 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 $113 for Model 212. 3. If the market price for Model 145 is $587.98 and the market price for Model 212 is $322.50, 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 Using ABC, compute the overhead cost per unit for each product line. (Round your final answers to 2 decimals places.) Activity Expected Costs Model 145 Activity driver Overhead incurred assigned Model 212 Activity driver Overhead incurred assigned Expected Activity Activity Rate Components Changeover Machining 609.650 357 240 182.000 890 Number of batches 7.800 Machine hours 100 Setups Setups Finishing Welding Inspecting 312 360 321475 53.300 5.700 Welding hours 835 r ections 200 Rework orders Support Purchasing 177,375 1 473 Purchase orders 400 U Total overhead cost Totens produced Other 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 $230 for Model 145 and $113 for Model 212. (Round your final answers to 2 decimal places.) Model 145 Model 212 Materials and Labor per unit Overhead cost per unit Total cost per unit 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 $587.98 and the market price for Model 212 is $322.50, determine the profit or loss per unit for each model. (Round your final answers to 2 decimal places.) Model 145 Model 212 Price per unit Cost per unit Profit (loss) per unit
