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 $ Machine hours MH

Setups Setups

$

Finishing Inspecting $ Inspections

Support Purchasing $ Purchase orders

Additional production information concerning its two models follows.

Units and Activities Model X Model Z

Units produced

Machine hours

Setups

Inspections

Purchase orders

Per Unit Model X Model Z

Selling price per unit $ $

Direct materials cost per unit

Direct labor cost per unit

Compute the activity rate for each activity using activitybased costing.

Using activitybased costing, compute the overhead cost per unit for each model.

Compute the total product cost per unit for each model.

For each model, compute the gross profit per unit selling price per unit minus product cost per unit