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.

Additional production information concerning its two product lines follows.

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 $280 for Model 145 and $170 for Model 212. 3. If the market price for Model 145 is $875 and the market price for Model 212 is $330, determine the profit or loss per unit for each model.

Process Activity Components Changeover Machining Setups Driver Number of batches Machine hours Number of setups Quantity 890 8,530 80 Finishing 4,400 Welding Inspecting Rework Overhead Cost $ 480,000 307,000 235,000 $1,022,000 $ 192,000 221,000 60,500 $ 473,500 $ 147,000 33,000 70,000 $ 250,000 Welding hours Number of inspections Rework orders 785 230 Support 465 Purchasing Providing space Providing utilities Purchase orders Number of units Number of units 4,720 4,720 Model 145 1,600 1,000 445 465 3,250 Model 212 3,120 3,400 445 Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders 5,280 40 170 310 155 Components department Finishing department Support department Model 145 Activity Driver Departmental OH Rate Total Overhead Cost Components Finishing Support Activity Driver Departmental OH Rate Total Overhead Cost Model 212 Components Finishing Support Model 145 Model 212 Materials and Labor per unit Overhead cost per unit Total cost per unit