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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 Components Changeover Machining Setups Overhead Cost Driver $ 470,000 Number of batches 301,000 Machine hours 230,000 Number of setups Quantity 890 7,840 220 $1,001,000 Finishing Welding Inspecting Rework $ 192,000 Welding hours 221,000 Number of inspections 64,000 Rework orders 4,900 885 180 $ 477,000 Support Purchasing Providing space Providing utilities $ 149,000 Purchase orders 32,500 Number of units 62,000 Number of units 525 4,960 4,960 $ 243,500 Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders Model 145 1,900 2,000 445 485 2,550 110 90 350 Model 212 3,060 2,900 445 400 5,290 110 90 175 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(Round your intermediate calculations and per unit cost answers to 2 decimal places.) Components department Finishing department Support department Model 145 Activity Driver Departmental OH Rate Total Overhead Cost Components Finishing Support Model 212 Activity Driver Departmental OH Rate Total Overhead Cost Components Finishing Support
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