Exercise 17-9 Using ABC to assess prices LO P3 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 Componente Changeover Machining Setups Driver Number of batches Machine hours Number of setups Quantity 870 7,830 Finishing 5,800 Welding Inspeeting Rework Overhead Coat $ 604,650 358,614 299,200 $1,262,464 $ 29, 120 344,100 36,800 $ 679,020 $ 153,000 31,600 31,430 $ 216,030 Welding hours Number of inspections Rework orders 930 160 Support 510 Purchasing Providing space Providing utilities Purchase orders Number of units Number of units 3.300 3,300 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 1,100 2,200 435 520 2,550 Model 212 2,200 3,600 435 410 5,280 80 80 100 340 60 170 Required: 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 $230 for Model 145 and $119 for Model 212. 3. If the market price for Model 145 is $1,158.14 and the market price for Model 212 is $636.36, determine the profit or loss per unit for each model. Required 1 Required 2 Required 3 Using ABC, compute the overhead cost per unit for each product line. (Round your final answers to 2 decimals places.) Model 145 Activity driver Overhead incurred assigned Activity Expected Costs Expected Activity Activity Rate Acti Components Changeover Machining 870 Number of batches 604 650 358,614 299,200 7.830 Machine hours 160 Setups Setups Finishing Welding 298,120 344,100 36,800 5,800 Welding hours 930 Inspections 160 Rework orders Inspecting Rework Support Purchasing Providing space and utilities ITILITI TTTTTTT 153,000 63,030 510 Purchase orders 3,300 Units Total overhead cost Total units produced Overhead cost per unit Required Required 2 > equirea Nad cost per unit for each product line. (Round your final answers to 2 decimals places.) Model 145 Activity driver Overhead incurred assigned Model 212 Activity driver Overhead incurred assigned ected Costs Expected Activity Activity Rate 604,650 358,614 299,200 870 Number of batches 7,830 Machine hours 160 Setups 298,120 344,100 36,800 5.800 Welding hours 930 Inspections 160 Rework orders 153,000 63,030 510 Purchase orders 3,300 Units Total overhead cost Total units produced Overhead cost per unit Required Required 2 > 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 $230 for Model 145 and $119 for Model 212. (Round your final 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 $1,158.14 and the market price for Model 212 is $636.36, determine the profit or loss per unit for each model. (Round your final answers to 2 decimal places.) Model 145 Model 212 Price per unit Cost per unit Profit (loss) per unit
