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		$	478,000		Number of batches	730
	Machining			303,000		Machine hours	8,550
	Setups			232,000		Number of setups	100
			$	1,013,000
Finishing	Welding		$	186,000		Welding hours	5,100
	Inspecting			221,000		Number of inspections	805
	Rework			63,500		Rework orders	140
			$	470,500
Support	Purchasing		$	143,000		Purchase orders	549
	Providing space			38,000		Number of units	5,200
	Providing utilities			71,000		Number of units	5,200
			$	252,000

	Model 145			Model 212
Units produced		2,100			3,100
Welding hours		1,600			3,500
Batches		365			365
Number of inspections		495			310
Machine hours		3,250			5,300
Setups		50			50
Rework orders		90			50
Purchase orders		366			183

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 $200 for Model 145 and $110 for Model 212.

3. If the market price for Model 145 is $1,400 and the market price for Model 212 is $280, determine the profit or loss per unit for each model.