Exercise 17-8 Using departmental overhead rates to assess prices LO P2 Way 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 Quantity 830 7,890 20 Finishing Welding Inspecting Rework Overhead Cost Driver $ 456,000 Number of batches 306,000 Machine hours 229,000 Number of setups $ 991,000 $ 186,000 Welding hours 223.000 Number of inspections 60,500 Rework orders $ 469,500 $ 147,000 Purchase orders 34,000 Number of units 70,000 Number of units $ 251,000 6,200 815 210 Support Purchasing Providing space Providing utilities 561 5,020 5,020 Additional production information concerning t radition follow 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 2,000 2,600 415 485 2,550 10 130 374 Model 212 3,020 3,600 415 330 5, 340 10 80 187 Required: 1. Determine departmental overhead rates and compute the overhead cost per unit for each product line. Base your overhead assignment for the components department on machine hours. Use welding hours to assign overhead costs to the finishing department. Assign costs to the support department based on number of purchase orders. 2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $310 for Model 145 and $130 for Model 212. 3. If the market price for Model 145 is $2,075 and the market price for Model 212 is $330, determine the profit or loss per unit for each model. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine departmental overhead rates and compute the overhead cost per unit for each product line. Base your overhead assignment for the components department on machine hours. Use welding hours to assign overhead costs to the finishing department. Assign costs to the support department based on number of purchase orders. (Round your intermediate calculations and per unit cost answers to 2 decimal places.) Show less A Components department Finishing department Support department Model 145 Activity Driver Departmental OH Rate Total Overhead Cost Components Finishing Support Activity Driver Departmental OH Rate Total Overhead Cost Model 212 Components Finishing Support 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 $310 for Model 145 and $130 for Model 212. (Round your intermediate calculations and cost per unit answers to 2 decimal places.) Model 145 Model 212 Materials and Labor per unit Overhead cost per unit Total cost per unit Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 If the market price for Model 145 is $2,075 and the market price for Model 212 is $330, determine the profit or loss per unit for each model. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations and final answers to 2 decimal places.) Model 145 Model 212 Market price per unit Cost per unit Profit (loss) per unit
