Question
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.)
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 unitStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started