Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please answer the following questions Way Cool produces two different models of air conditioners. The company produces the mechanical systems in its components department. The

Please answer the following questions

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.

Process Activity Overhead Cost Driver Quantity
Components Changeover $ 430,550 Number of batches 790
Machining 387,156 Machine hours 8,380
Setups 148,400 Number of setups 80
$ 966,106
Finishing Welding $ 287,260 Welding hours 5,300
Inspecting 342,000 Number of inspections 900
Rework 31,500 Rework orders 150
$ 660,760
Support Purchasing $ 180,560 Purchase orders 488
Providing space 31,500 Number of units 3,600
Providing utilities 37,620 Number of units 3,600
$ 249,680

Additional production information concerning its two product lines follows.

Model 145 Model 212
Units produced 1,200 2,400
Welding hours 1,600 3,700
Batches 395 395
Number of inspections 500 400
Machine hours 3,050 5,330
Setups 40 40
Rework orders 80 70
Purchase orders 325 163

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 $200 for Model 145 and $121 for Model 212. 3. If the market price for Model 145 is $923.36 and the market price for Model 212 is $542.02, determine the profit or loss per unit for each model.

Using ABC, compute the overhead cost per unit for each product line. (Round your final answers to 2 decimal places.)

image text in transcribedimage text in transcribed

image text in transcribedimage text in transcribed

Activity Expected Costs Expected Activity Activity Rate Activity incu $ 430,550 387,156 148,400 790 Number of batches 8,380 Machine hours 80 Setups Components Changeover Machining Setups Finishing Welding Inspecting Rework Support Purchasing Providing space and utilities $ 287,260 342,000 31,500 5,300 Welding hours 900 Inspections 150 Rework orders $ 488 Purchase orders 180,560 69,120 3,600 Units Total overhead cost Total units produced Overhead cost per unit Activity driver incurred Overhead assigned Activity driver incurred Overhead assigned Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $200 for Model 145 and $121 for Model 212. (Round your final answers to 2 decimal places.) Model 145 Model 212 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 $923.36 and the market price for Model 212 is $542.02, 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Internal Audit Of Treasury And Cash Management

Authors: Badr Bentalha

1st Edition

B0BM3R6WG7, 979-8363213779

More Books

Students also viewed these Accounting questions

Question

Understand the different approaches to job design. page 167

Answered: 1 week ago