Ice Cool produces two different models of air conditioners. The activities, costs, and cost drivers associated with the production processes follow.

Process Activity Budgeted Cost Activity Cost Driver Budgeted Activity Usage Assembly Machining $ 310,400 Machine hours (MH) 7,600 Setups 24,000 Setups 180 $ 334,400 Finishing Inspecting $ 224,000 Inspections 800 Support Purchasing $ 134,000 Purchase orders 570 Additional production information concerning its two models follows. Units and Activities Model X Model Z Units produced 1,600 3,200 Machine hours 2,200 5,400 Setups 60 120 Inspections 500 300 Purchase orders 380 190 Per Unit Model X Model Z Selling price per unit $ 405 $ 385 Direct materials cost per unit 155 105 Direct labor cost per unit 145 130

1. Compute the activity rate for each activity using activity-based costing.

2. Using activity-based costing, compute the overhead cost per unit for each model.

3. Compute the total product cost per unit for each model.

4. For each model, compute the gross profit per unit (selling price per unit minus product cost per unit).