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Type or paste question here Please help solve. Way Cool produces two different models of air conditioners. The company produces the mechanical systems in its
Type or paste question here
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Way Cool produces two different models of air conditioners. The company produces the mechanical systems in its 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 Driver Number of batches Machine hours Number of setups Quantity 770 8,490 100 Finishing Welding Inspecting Rework Overhead Cost $ 458, 150 403,275 181,500 $1,042,925 $ 314,880 321,275 39,950 $ 676,105 $ 183,885 31,500 80,700 $ 296,085 Welding hours Number of inspections Rework orders 4,800 905 170 Support Purchasing Providing space Providing utilities Purchase orders Number of units Number of units 533 6,000 6,000 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 1,600 385 505 3,150 50 70 355 Model 212 4,000 3,200 385 400 5,340 50 100 178 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 $250 for Model 145 and $120 for Model 212. 3. If the market price for Model 145 is $715.68 and the market price for Model 212 is $391.59, determine the profit or loss per unit for each model. Activity Expected Costs Expected Activity Activity Rate Components Changeover $ 458,150 770 Number of batches $ 458,920.00 X per batch 403,275 8,490 Machine hours $ 8,490.00 per machine hour 100.00 X per setup 181,500 100 Setups $ Machining Setups Finishing Welding Inspecting $ 4,800 $ 314,880 321,275 39,950 Welding hours Inspections 4,800.00 X per welding hour 905.00 X per inspection 905 $ Rework 170 Rework orders $ 170.00 per rework order Support Purchasing $ 183,885 533 533.00 X per purchase order Purchase orders Units Providing space and utilities 112,200 6,000 6,000.00 per unit Total overhead cost Total units produced Overhead cost per unit Model 145 Activity Overhead driver incurred assigned Model 212 Activity Overhead driver incurred assigned 385 $ 400 x 183,568,000 5,340 45,336,600 3,150 50 5,000 50 5,000 1,600 3,200 15,360,000 505 7,680,000 457,025 11,900 400 362,000 17,000 70 100 355 189,215 178 94,874 2,000 12,000,000 4,000 24,000,000 $ 268,743,474 $20,343,140 1,300 X Model 145 Model 212 $ 250.00 $ 120.00 Materials and Labor per unit Overhead cost per unit Total cost per unit Model 145 Model 212 $ 715.68 $ 391.59 Price per unit Cost per unit Profit (loss) per unitStep by Step Solution
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