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 830 8,470 60 Finishing Welding Inspecting Rework Overhead Cost $ 454,000 306,000 234,000 $ 994,000 $ 190,000 231,000 63,500 $ 484,500 $ 147,000 34,500 62,000 $ 243,500 Welding hours Number of inspections Rework orders 5,200 855 260 Support Purchasing Providing space Providing utilities Purchase orders Number of units Number of units 477 4,770 4,770 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 1,700 2,000 415 465 3,150 30 140 318 Model 212 3,070 3,200 415 390 5,320 30 120 159 Required: 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 number of purchase orders. 2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $270 for Model 145 and $210 for Model 212. 3. If the market price for Model 145 is $1,775 and the market price for Model 212 is $280, determine the profit or loss per unit for each model. Required 1 Required 2 Required 3 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 number of purchase orders. (Round your intermediate calculations and per unit cost answers to 2 decimal places.) Show less Components department per machine hour 8,470 Machine hours Finishing department per welding hour 5,200 Welding hours Support department per purchase order Number of purchase orders 477 Model 145 Activity Driver Departmental OH Rate Components Finishing Support Total Overhead Cost $ 0 $ 0 0 Model 212 Activity Driver Departmental OH Rate Components Finishing Support Total Overhead Cost $ 0 $ 0 0 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 $270 for Model 145 and $210 for Model 212. (Round your intermediate calculations and cost per unit answers to 2 decimal places.) Model 145 Model 212 $ 270.00 $ 210.00 Materials and Labor per unit Overhead cost per unit Total cost per unit Required 1 Required 2 Required 3 If the market price for Model 145 is $1,775 and the market price for Model 212 is $280, determine the profit or loss per unit for each model. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations and final answers to 2 decimal places.) Model 145 Model 212 $ 1,775.00 $ 280.00 Market price per unit Cost per unit Profit (loss) per unit
