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		$	476,000		Number of batches	770
	Machining			307,000		Machine hours	8,410
	Setups			229,000		Number of setups	140
			$	1,012,000
Finishing	Welding		$	192,000		Welding hours	5,700
	Inspecting			224,000		Number of inspections	905
	Rework			64,500		Rework orders	230
			$	480,500
Support	Purchasing		$	145,000		Purchase orders	465
	Providing space			33,500		Number of units	4,870
	Providing utilities			69,000		Number of units	4,870
			$	247,500

Additional production information concerning its two product lines follows.

	Model 145			Model 212
Units produced		1,800			3,070
Welding hours		2,600			3,100
Batches		385			385
Number of inspections		505			400
Machine hours		3,050			5,360
Setups		70			70
Rework orders		120			110
Purchase orders		310			155

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 a number of purchase orders.

Components Department

0

Finishing department

		0

Support department

		0

Model 145	Activity Driver	Departmental OH Rate	Total Overhead Cost
Components			$0
Finishing			$0
Support			$0

Model 212	Activity Driver	Departmental OH Rate	Total Overhead Cost
Components			$0
Finishing			$0
Support			$0

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 $210 for Model 212.

	Model 145	Model 212
Materials and Labor per unit
Overhead cost per unit
Total cost per unit

3. If the market price for Model 145 is $2,000 and the market price for Model 212 is $320, determine the profit or loss per unit for each model.

	Model 145	Model 212
Market price per unit
Cost per unit
Profit (loss) per unit