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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
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. (Round OH rate, cost per unit and dollar amounts answers to 2 decimal places.) Process Activity Components Changeover Machining Setups Quantity 730 7,720 160 Finishing Welding Inspecting Rework Overhead Cost Driver $ 459,000 Number of batches 300,600 Machine hours 226,500 Number of setups $986, 100 $180,600 Welding hours 225,000 Number of inspections 60,800 Rework orders $ 466,400 $ 138,000 Purchase orders 31,450 Number of units 60, 600 Number of units $ 230,050 3,600 865 160 Support Purchasing Providing space Providing utilities 465 5,400 5, 400 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 1,800 800 365 520 2,270 80 90 310 Model 212 3,600 2,800 365 345 5,450 80 70 155 1. Using a plantwide overhead rate based on machine hours, compute the overhead cost per unit for each product line. 0 Activity Driver Plantwide OH rate Units Produced OH Cost per unit Overhead Assigned Model 145 Model 212 Total Overhead Cost $ 0 $ 0 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 $140 for Model 212. Model 145 Model 212 0 3. Assume if the market price for Model 145 is $757 and the market price for Model 212 is $580, determine the profit or loss per unit for each model. Model 145 Model 212 Market price
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