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Formula explanations will be much appreciated. Way Cool produces two different models of air conditioners. The company produces the mechanical systems in its components department.
Formula explanations will be much appreciated.
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 Overhead Cost Driver $408,250 Number of batches 373,395 Machine hours 184,500 Number of setups $966,145 Quantity 710 8,030 100 Finishing Welding Inspecting Rework Welding hours Number of inspections Rework orders 6,400 865 180 $430,080 320,050 51,300 $801,430 $160,800 30,700 Support 480 Purchase orders Number of units 8,700 Purchasing Providing space Providing utilities 131,120 Number of units 8,700 $322,620 Additional production information concerning its two product lines follows. Model 212 Model 145 2,900 2,200 355 Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders 5,800 4,200 355 370 5,280 50 495 2,750 50 130 50 320 160 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 $114 for Model 212. 3. If the market price for Model 145 is $579.45 and the market price for Model 212 is $310.40, 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 decimal places.) Model 212 Model 145 Activity driver Overhead incurred assigned Activity Expected Costs Expected Activity Activity Rate Activity driver incurred Overhead assigned Components Changeover $ 408,250 710 Number of batches Machining 373,395 8,030 Machine hours 184,500 100 Setups Setups Finishing Welding $ 430,080 6,400 Welding hours Inspecting 320,050 865 Inspections Rework 51,300 180 Rework orders Support Purchasing $ 160,800 480 Purchase orders Providing space and utilities 161,820 8,700 Units Total overhead cost Total units produced Overhead cost per unitStep by Step Solution
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