Managerial Accounting
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 nishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support processfoHovm Process Activity Overhead Cost Driver Quantity Number of Components Changeover $ 535,150 batches 770 Machining 392,372 Machine hours 8,420 Setups 187 . 500 \"\"1\"\": f 100 setups $1,115,022 Finishing Welding $ 319,770 Welding hours 5,100 . Number of Inspecting 242,475 inspections 795 Rework 60,900 Rework orders 290 $ 623,145 Support Purchasing $ 174,375 Purchase orders 465 PrVldlng 30,800 Number of units 3,700 space Providing 134.500 Number of units 8,700 utilities $ 339,675 I; Additional production information concerning its two product lines follows. Model 145 Model 212 Units produced 2,900 5,800 Welding hours 1,800 3,300 Batches 385 385 Fumber ?f 475 320 inspections Machine hours 3,150 5,270 Setups 50 50 Rework orders 170 120 Purchase orders 310 155 ' 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 $112 for Model 212. 3. If the market price for Model 145 is $586.01 and the market price for Model 212 is $303.00, determine the prot or loss per unit for each model. Required Required Required 1 2 3 Using ABC, compute the overhead cost per unit for each product line. (Round your final answers to 2 decimal places.) Model 145 Model 212 Activity Activity Activity Expected Expected Activity Activity Rate Overhead driver Overhead Costs driver incurred assigned incurred assigned Components Changeover $ 535, 150 770 Number of batches Machining 392,372 8,420 Machine hours Setups 187,500 100 Setups Finishing Welding $ 319,770 5,100 Welding hours Inspecting 242,475 795 Inspections Rework 60,900 290 Rework orders Support Purchasing $ 174,375 465 Purchase orders Providing space and utilities 165,300 8,700 Units Total overhead cost $ 0 $ 0 Total units produced Overhead cost per unitDetermine 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 $112 for Model 212. (Round your nal answers to 2 decimal places.) Materials and Labor per unit Overhead cost per unit Total cost per unit Required 1 Required 2 Required 3 If the market price for Model 145 is $586.01 and the market price for Model 212 is $303.00, determine the profit or loss per unit for each model. (Round your final answers to 2 decimal places.) Model 145 Model 212 Price per unit Cost per unit Profit (loss) per unit
