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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

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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. Overhead Cost Driver Process Activity Quantity 790 Components Changeover 517,450 Number of batches Machining 380,230 Machine hours 8,090 Setups 145,600 Number of setups 80 $1,043,280 349,440 Welding hours Finishing Welding 6,400 Inspecting 277,100 Number of inspections 815 Rework 53,900 Rework orders 680,440 s 196,650 Purchase orders Support Purchasing 570 Providing space 31,100 Number of units 5,700 Providing utilities 74,920 Number of units 5,700 302,670

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