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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
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 Components Activity Changeover Machining Setups Driver Number of batches Machine hours Number of setups Quantity 710 7,830 160 Finishing Welding Inspecting Rework Overhead Cost $ 457,950 362,529 297,600 $1,118,079 $ 332,080 247,275 32,800 $ 612,155 $ 204,610 30,500 131,320 $ 366,430 Welding hours Number of inspections Rework orders 5,600 785 160 Support Purchasing Providing space Providing utilities Purchase orders Number of units Number of units 518 8,700 8,700 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 2,900 1,600 355 465 2,550 80 70 345 Model 212 5,800 4,000 355 320 5,280 80 90 173 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 $200 for Model 145 and $118 for Model 212. 3. If the market price for Model 145 is $525.43 and the market price for Model 212 is $317.60, 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 Activity driver Overhead incurred assigned Model 212 Activity driver Overhead incurred assigned Expected Costs Activity Rate Activity Expected Activity Activity Rate $ 457,950 362,529 297,600 710 Number of batches 7,830 Machine hours 160 Setups Components Changeover Machining Setups Finishing Welding Inspecting Rework Support Purchasing Providing space and utilities 332,080 247,275 32,800 5,600 Welding hours 785 Inspections 160 Rework orders $ 204,610 161,820 518 Purchase orders 8,700 Units Total overhead cost Total units produced Overhead cost per unit Required 1 Required 2 >
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