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	Overhead Cost				Driver	Quantity
Components	Changeover		$	416,250		Number of batches	750
	Machining			393,063		Machine hours	8,310
	Setups			72,600		Number of setups	40
			$	881,913
Finishing	Welding		$	324,360		Welding hours	5,100
	Inspecting			313,250		Number of inspections	895
	Rework			44,650		Rework orders	190
			$	682,260
Support	Purchasing		$	183,000		Purchase orders	488
	Providing space			30,700		Number of units	6,300
	Providing utilities			90,260		Number of units	6,300
			$	303,960

Additional production information concerning its two product lines follows.

	Model 145			Model 212
Units produced		2,100			4,200
Welding hours		1,000			4,100
Batches		375			375
Number of inspections		495			400
Machine hours		3,050			5,260
Setups		20			20
Rework orders		100			90
Purchase orders		325			163

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 $190 for Model 145 and $121 for Model 212. 3. If the market price for Model 145 is $576.83 and the market price for Model 212 is $373.09, 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

Using ABC, compute the overhead cost per unit for each product line. (Round your final answers to 2 decimal places.)

						Model 145		Model 212
Activity	Expected Costs	Expected Activity		Activity Rate		Activity driver incurred	Overhead assigned	Activity driver incurred	Overhead assigned
Components
Changeover	$416,250	750	Number of batches
Machining	393,063	8,310	Machine hours
Setups	72,600	40	Setups
Finishing
Welding	$324,360	5,100	Welding hours
Inspecting	313,250	895	Inspections
Rework	44,650	190	Rework orders
Support
Purchasing	$183,000	488	Purchase orders
Providing space and utilities	120,960	6,300	Units
					Total overhead cost
					Total units produced
					Overhead cost per unit

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 $121 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

If the market price for Model 145 is $576.83 and the market price for Model 212 is $373.09, 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