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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. Process Activity Assembly
Ice Cool produces two different models of air conditioners. The activities, costs, and cost drivers associated with the production processes follow. Process Activity Assembly Machining Setups Finishing Support Budgeted Cost $ 311,800 22,000 $ 333,800 Inspecting $ 222,000 Purchasing $ 138,000 Budgeted Activity Activity Cost Driver Machine hours (MB) Usage 7,200 Setups 60 Inspections 760 Purchase orders 540 Additional production information concerning its two models follows. Units and Activities Units produced Machine hours Inspections Setups Purchase orders Per Unit Selling price per unit Model X 1,800 Model 2 3,600 2,200 5,000 20 40 500 260 360 180 Model X Model z $415 160 $ 395 110 130 155 Direct materials cost per unit Direct labor cost per unit 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 this question by entering your answers in the tabs below.
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