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.

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 $190 for Model 145 and $120 for Model 212.
3. Assume if the market price for Model 145 is $795 and the market price for Model 212 is $510, determine the profit or loss per unit for each model.

Process Activity Overhead Cost Driver Quantity $415,350 372,552 190,000 $977,902 $398,330 313,125 67,500 $778,955 $205,500 32,000 113,860 $351,360 Number of batches Machine hours Number of setups 710 8,170 100 Components Changeover Machining Setups 6,100 835 250 Finishing Welding Inspecting Rework Welding hours Number of inspections Rework orders Purchasing Providing space Providing utilities Purchase orders Number of units Number of units 548 7,800 7,800 Support Additional production information concerning its two product lines follows Model 145 Model 212 Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders 2,600 2,200 355 515 2,850 50 160 365 5,200 3,900 355 320 5,320 50 90 183