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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 with

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.

Process Activity Overhead Cost Driver Quantity
Components Changeover $ 448,950 Number of batches 730
Machining 399,784 Machine hours 8,470
Setups 288,800 Number of setups 160
$ 1,137,534
Finishing Welding $ 233,220 Welding hours 4,600
Inspecting 255,150 Number of inspections 810
Rework 31,200 Rework orders 120
$ 519,570
Support Purchasing $ 176,120 Purchase orders 518
Providing space 31,200 Number of units 8,400
Providing utilities 130,080 Number of units 8,400
$ 337,400

Additional production information concerning its two product lines follows.

Model 145 Model 212
Units produced 2,800 5,600
Welding hours 1,200 3,400
Batches 365 365
Number of inspections 460 350
Machine hours 3,150 5,320
Setups 80 80
Rework orders 70 50
Purchase orders 345 173

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 $220 for Model 145 and $114 for Model 212. 3. If the market price for Model 145 is $546.42 and the market price for Model 212 is $307.69, determine the profit or loss per unit for each model.

Complete this question by entering your answers in the tabs below.

  • Required 1
  • Using ABC, compute the overhead cost per unit for each product line. (Round your final answers to 2 decimals places.)
  • Required 2
  • Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $220 for Model 145 and $114 for Model 212. (Round your final answers to 2 decimal places.)
  • Required 3
  • If the market price for Model 145 is $546.42 and the market price for Model 212 is $307.69, determine the profit or loss per unit for each model. (Round your final answers to 2 decimal places.)

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