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.

Additional production information concerning its two product lines follows.

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 $250 for Model 145 and $180 for Model 212. 3. Assume if the market price for Model 145 is $800 and the market price for Model 212 is $470, determine the profit or loss per unit for each model.

Required 1

Required 2

Required 3

Process Components Activity Changeover Machining Setups Driver Number of batches Machine hours Number of setups Quantity 800 6,000 120 Finishing Welding Inspecting Rework Overhead Cost $ 500,000 279,000 225,000 $1,004,000 $ 180,300 210,000 75,000 $ 465,300 $ 135,000 32,000 65,000 $ 232,000 Welding hours Number of inspections Rework orders 3,000 700 300 Support Purchasing Providing space Providing utilities Purchase orders Number of units Number of units 450 5,000 5,000 Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders Model 145 1,500 800 400 400 1,800 60 160 300 Model 212 3,500 2,200 400 300 4,200 60 140 150 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 $ 500,000 800 Number of batches per batch 279,000 6,000 Machine hours per machine hour 225,000 120 Setups per setup Activity Components Changeover Machining Setups Finishing Welding Inspecting Rework Support Purchasing Providing space and utilities $ 180,300 210,000 3,000 Welding hours 700 Inspections per welding hour per inspection per rework order 75,000 300 Rework hours $ 135,000 450 Purchase orders per purchase order 97,000 5,000 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 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 $250 for Model 145 and $180 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 Required 1 Required 2 Required 3 Assume if the market price for Model 145 is $800 and the market price for Model 212 is $470, 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