Question
Way Cool produces two different models of air conditioners. The company produces the mechanical systems in its components department. The mechanical systems are combined
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 Finishing Welding Inspecting Rework Support Purchasing Providing space Providing utilities Overhead Cost $460,000 Driver Quantity Number of batches 305,000 Machine hours 810 7,800 225,000 Number of setups 140 $990,000 $192,000 Welding hours 5,200 233,000 Number of inspections 888 62,000 Rework orders 140 $487,000 $141,000 Purchase orders 495 36,000 Number of units 5,120 63,000 Number of units 5,120 $240,000 Additional production information concerning its two product lines follows. Model 145 Model 212 Units produced 2,000 3,120 Welding hours 1,400 3,800 Batches 405 485 Number of inspections 490 390 Machine hours 2,450 5,350 Setups 70 70 Rework orders 70 70 Purchase orders 338 165
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