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 Overhead Cost Driver Quantity Components Changeover $ 590,750 Number of batches 850 Machining 359,119 Machine hours 7,790 Setups 186,000 Number of setups 100 $ 1,135,869 Finishing Welding $ 325,500 Welding hours 5,000 Inspecting 321,100 Number of inspections 845 Rework 71,400 Rework orders 280 $ 718,000 Support Purchasing $ 198,685 Purchase orders 503 Providing space 31,200 Number of units 8,100 Providing utilities 119,460 Number of units 8,100 $ 349,345 Additional production information concerning its two product lines follows. Model 145 Model 212 Units produced 2,700 5,400 Welding hours 1,000 4,000 Batches 425 425 Number of inspections 525 320 Machine hours 2,450 5,340 Setups 50 50 Rework orders 160 120 Purchase orders 335 168 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 $220 for Model 145 and $115 for Model 212. 3. Assume if the market price for Model 145 is $915 and the market price for Model 212 is $530, determine the profit or loss per unit for each model.

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 $220 for Model 145 and $115 for Model 212. 3. Assume if the market price for Model 145 is $915 and the market price for Model 212 is $530, determine the profit or loss per unit for each model.

Complete this question by entering your answers in the tabs below.

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.)

1.

Activity	Expected Costs	Expected Activity		Activity Rate
Components
Changeover	$590,750	850	Number of batches		per batch
Machining	359,119	7,790	Machine hours		per machine hour
Setups	186,000	100	Setups		per setup
Finishing
Welding	$325,500	5,000	Welding hours		per welding hour
Inspecting	321,100	845	Inspections		per inspection
Rework	71,400	280	Rework hours		per rework order
Support
Purchasing	$198,685	503	Purchase orders		per purchase order
Providing space and utilities	150,660	8,100	Units		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
Model 212	----------Activity rate----------			Activity driver incurred	Overhead assigned
Components
Changeover
Machining
Setups
Finishing
Welding
Inspecting
Rework
Support
Purchasing
Providing space and utilities

2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $220 for Model 145 and $115 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

3.Assume if the market price for Model 145 is $915 and the market price for Model 212 is $530, 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