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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
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 Overhead Cost $ 568,550 369,413 Driver Quantity 830 7,810 120 Number of batches Machine hours 222,000 Number of setups $1,159,963 $ 286,590 Welding hours 4,100 Inspecting 262,350 Number of inspections 795 Rework 39,900 Rework orders 190 $ 588,848 Support Purchasing $ 175,725 Purchase orders 495 Providing space 30,200 Number of units. Providing utilities 105,880 Number of units 7,200 7,200 $ 311,805 Additional production information concerning its two product lines follows. Model 145 Model 212 Units produced 2,400 4,800 Welding hours 1,000 3,100 Batches 415 415 Number of inspections 455 340 Machine hours 2,450 5,360 Setups 60 60 Rework orders 80 110 Purchase orders 330 165 Required: 1. Using ABC, compute the overhead cost per unit for each product line. 2 notermine the total cost ner unit for each product line if the direct labor and direct materials roste ner init are $250 for Moviel 4
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