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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 Assembly Activity
Ice Cool produces two different models of air conditioners. The activities, costs, and cost drivers associated with the production processes follow. Process Assembly Activity Machining Setups Budgeted Cost $310,800 26,000 $ 336,800 Finishing Inspecting $220,000 Support Purchasing $ 138,000 Budgeted Activity Activity Cost Driver Usage: Machine hours (MH) 7,600 Setups 240 Inspections 780 Purchase orders 510 Additional production information concerning its two models follows. Units and Activities. Units produced Model X Model Z 1,600 3,200 Machine hours Setups Inspections Purchase orders 2,400 5,200 80 160 540 240 340 170 Per Unit Model X Model Z Selling price per unit $ 405 $ 385 Direct materials cost per unit 145 115 Direct labor cost per unit 140 145 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. Required 1 Required 2 Required 3 Required 4
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