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Way Cool produces two different models of air conditioners. The company produces the mechanical systems in their components department. The mechanical systems are combined
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. (Round your intermediate calculations and round cost per unit and OH rate answers to 2 decimal places.) Process Activity Overhead Cost Driver Quantity Components Changeover Machining $455,520 270,000 Number of batches 730 Machine hours 7,500 Setups 230,400 Number of setups 160 $955,920 Finishing Welding $189,000 Welding hours 4,500 Inspecting Rework 229,500 Number of inspections 62,400 Rework orders 850 200 $480,900 Support Purchasing $147,840 Purchase orders 560 Providing space Providing utilities 30,600 Number of units 40,800 Number of units $219,240 5,100 5,100 Additional production information concerning its two product lines follows. Model 145 Model 212 Units produced 2,000 3,100 Welding hours 2,400 2,100 Batches 365 365 Number of inspections 500 350 Machine hours 2,300 5,200 Setups 80 80 Rework orders 110 90 Purchase orders 400 160 1. Using the plantwide method and machine hours as the activity base, calculate how much overhead is applied to each model per unit. 10 POINTS 2. Using the departmental method, machine hours as activity base for Components, number of inspections for finishing, and number of units for Support, calculate how much overhead is applied to each model per unit. 10 POINTS 3. Using ABC, compute the overhead cost per unit for each product line. 20 POINTS
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