L Exercise 04-11 Using ABC to assess prices LO P3 Way Cool produces two different models of air conditioners. The company produces the mechanical systems in its components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow Overhead Cost Quantity 000 6,000 120 Process Activity Driver Components Changeover $ 500,000 Number of batches Machining 279,000 Machine hours Setups 225,000 Number of setups $1,004,000 Finishing Welding $ 180,300 welding hours 3,000 Inspecting Revork 210,000 Number of inspections 700 75,000 Rework orders 300 $465,300 Support Purchasing Providing space Providing utilities $135,000 Purchase orders 450 32,000 Number of units 5,000 65,000 Number of units 5,000 $ 232,000 Additional production information concerning its two product lines follows. Model 145 Hodel 212 Units produced 1,500 3,500 Welding hours 800 2,200 Batches 400 400 Number of Inspections 400 300 Machine hours 1,000 4,200 Setups 60 60 Revork orders 160 140 Purchase orders: $300 150 Required: 1. Using ABC, compute the overhead cost per unit for each product line. 2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $250 for Model 145 and $180 for Model 212 3. If the market price for Model 145 is $820 and the market price for Model 212 is $480, determine the profit or loss per unit for each model.