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.
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 $120 for Model 212. 3. If the market price for Model 145 is $699.51 and the market price for Model 212 is $394.50, determine the profit or loss per unit for each model.
Check my work 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 750 8,440 160 Finishing Welding Inspecting Rework Overhead Cost $ 506,250 400,056 297,600 $1,203,906 $ 370,520 281,125 45,050 $ 696,695 $ 200,020 31,700 87,370 $ 319,090 Welding hours Number of inspections Rework orders 5,900 865 170 Support Purchasing Providing space Providing utilities Purchase orders Number of units Number of units 548 6,300 6,300 Additional production information concerning its two product lines follows. Model 145 2,100 Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders 2,400 375 515 3,150 80 100 Model 212 4,200 3,500 375 350 5,290 80 70 ou OV Setups Rework orders Purchase orders 100 365 70 183 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 $120 for Model 212. 3. If the market price for Model 145 is $699.51 and the market price for Model 212 is $394.50, 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 Activity driver incurred Activity Expected Costs Expected Activity Activity Rate 750 Number of batches $ 375 506,250 400,056 297,600 675.00 per batch 47.40 per machine hour Components Changeover Machining Setups Finishing Welding Inspecting $ 8,440 Machine hours 160 Setups 1,860.00 per setup $ 370,520 281,125 45,050 5,900 Welding hours 865 Inspections 170 Rework orders $ 62.80 per welding hour 325.00 per inspection 265.00 per rework order Rework $ Support Purchasing Providing space and utilities $ 548 Purchase orders 200,020 119,070 AA 365.00 per purchase order 18.90 per unit 6,300 Units Total overhead cost Total units produced Overhead cost per unit 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 $120 for Model 212. 3. If the market price for Model 145 is $699.51 and the market price for Model 212 is $394.50, 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 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 $120 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
