Real Cool produces two different models of air conditioners. The company produces the mechanical systems in their 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.
Real Cool produces two different models of air conditioners. The company produces the mechanical systems in their 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 Components Changeover Machining Setups Driver Number of batches Machine hours Number of setups Quantity 850 8,540 140 Finishing Welding Inspecting Rework Overhead Cost $ 505,750 391,986 264,600 $1,162,336 $ 286,650 295,800 55,350 $ 637,800 $ 160,425 31,400 88,300 $ 280,125 Welding hours Number of inspections Rework orders 4,500 870 270 Support Purchasing Providing space Providing utilities Purchase orders Number of units Number of units 465 6,300 6,300 Additional production information concerning its two product lines follows. Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders Model 145 2,100 1,000 425 520 3,250 70 150 310 Model 212 4,200 3,500 425 350 5,290 70 120 155 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 $240 for Model 145 and $117 for Model 212. 3. Assume if the market price for Model 145 is $935 and the market price for Model 212 is $510, determine the profit or loss per unit for each model. Required 1 Required 2 Required 3 Using ABC, compute the overhead cost per unit for each product line. (Round your intermediate calculations, overhead rate, and activity rate answers to 2 decimal places.) Expected Costs Expected Activity Activity Rate 505,750 391,986 264,600 850 Number of batches 8,540 Machine hours 140 Setups per batch per machine hour per setup Activity Components Changeover Machining Setups Finishing Welding Inspecting Rework Support Purchasing Providing space and utilities $ 286,650 295,800 55,350 4,500 Welding hours 870 Inspections 270 Rework hours per welding hour per inspection per rework order $ 160,425 119,700 465 Purchase orders 6,300 Units per purchase order per unit Model 145 --Activity rate- Activity driver incurred Overhead assigned Components Changeover Machining Setups Finishing Welding Inspecting Rework Support Purchasing Providing space and utilities 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 $240 for Model 145 and $117 for Model 212. (Round your intermediate calculations and final answers to 2 decimal places.) Model 145 Model 212 Materials and Labor per unit Overhead per unit Total cost per unit Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Assume if the market price for Model 145 is $935 and the market price for Model 212 is $510, determine the profit or loss per unit for each model. (Round your intermediate calculations and final answers to 2 decimal places.) Model 145 Model 212 Price per unit Cost per unit Profit (loss) per unit
