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 Process Activity Components Changeover Overhead Cost Driver Quantity 5 576,850 Number of botches Machining Setups 830 8,350 80 394,120 $1,122,570 288,600 S 692,850 Machine hours Number of setups Finishing Welding $ 356,25 Wlding hours 5,708 7B0 200 Number of inspections Inspecting Rework 48,8 ework orders Purchasing Providing space Providing utilities S 207,375 31,800 49.260 Purchase orders Number of units Number of units Support 525 4,203 4,200 $ 288,435 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 1,400 2,600 415 460 3,050 48 158 350 2,800 3,100 415 328 5,380 48 58 175 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 $250 for Model 145 and $116 for Model 212. 3. If the market price for Model 145 is $994.97 and the market price for Model 212 is $495.65, determine the profit or loss per unit for each model Required Required 2Required 3 Using ABC, compute the overhead cost per unit for each product line. (Round your final answers to 2 decimals places.) Model 145 Model 212 Activity Activity driver Overhead Activity driver Overhead Expected Costs Expected Activity Activity Rate incurred assigned incurred assi Components Changeover Machining Setups 576,850 394.120 151,600 830 Number of batches 8,350 Machine hours 80 Setups Finishing Welding Inspecting Rework 356,250 288,600 48,000 5,700 Welding hours 780 Inspections 200 Rework orders Support Purchasing Providing space and utilities $ 207,375 81,060 525 Purchase orders 4,200 Units Total overhead cost Total units produced Overhead cost per unit Required 1 Required 2 > 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 $250 for Model 145 and $116 for Model 212. 3. If the market price for Model 145 is $994.97 and the market price for Model 212 is $495.65, 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 the total cost per unit for each product line if the direct labor and direct materials costs per unit are $250 for Model 145 and $116 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 If the market price for Model 145 is $994.97 and the market price for Model 212 is $495.65, 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
