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Ice Cool produces two different models of air conditioners. The activities, costs, and cost drivers associated with the production processes follow. Budgeted Activity Process Assembly
Ice Cool produces two different models of air conditioners. The activities, costs, and cost drivers associated with the production processes follow. Budgeted Activity Process Assembly Activity Machining Budgeted Cost $310,000 Activity Cost Driver Usage Machine hours (MH) 7,800 Setups 22,000 $332,000 Setups 120 Finishing Inspecting $ 226,000 Inspections 820 Support Purchasing $ 132,000 Purchase orders 480 Additional production information concerning its two models follows. Units and Activities Units produced Machine hours Setups Inspections Purchase orders Per Unit Selling price per unit Model X 1,400. Model 2,800 2,400 5,400 40 80 500 320 320 160 Model X $405 Model 2 $385 Direct materials cost per unit Direct labor cost per unit 160 125 115 130 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). Complete the questi
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