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. Quantity Process Activity Components Changeover Machining Setups 800 6,000 120 Finishing Welding Inspecting Rework Overhead Cost Driver $ 500,000 Number of batches 279,000 Machine hours 225,000 Number of setups $1,004,000 $ 180,300 Welding hours 210,000 Number of inspections 75,000 Rework orders $ 465,300 $ 135,000 Purchase orders 32,000 Number of units 65,000 Number of units $ 232,000 3,000 700 300 Support Purchasing Providing space Providing utilities 450 5,000 5,000 Additional production information concerning its two product lines follows. Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders Model 145 1,500 800 400 400 1,800 60 160 300 Model 212 3,500 2,200 400 300 4,200 60 140 150 Required: 1. Using ABC, compute the overhead cost per unit for each product line. 2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $250 for Model 145 and $180 for Model 212. 3. If the market price for Model 145 is $820 and the market price for Model 212 is $480, determine the profit or loss per unit for each model. Required 1 Required 2 Required 3 Using ABC, compute the overhead cost per unit for each product line. (Round your final answers to 2 decimal places.) Model 145 Activity driver Overhead incurred assigned Activity Expected Costs Expected Activity Activity Rate Activity di incurre Components Changeover $ 500,000 800 Number of batches 279,000 225,000 6,000 Machine hours 120 Setups Machining Setups Finishing Welding Inspecting $ 180,300 210,000 75,000 3,000 Welding hours 700 Inspections Rework 300 Rework orders Support Purchasing Providing space and utilities $ 450 Purchase orders 135,000 97,000 5,000 Units Total overhead cost $ 0 Total units produced Overhead cost per unit Required 1 Required 2 Required 3 Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $250 for Model 145 and $180 for Model 212. (Round your final answers to 2 decimal places.). Model 145 Model 212 Materials and Labor per unit Overhead cost per unit Total cost per unit Required 1 Required 2 Required 3 If the market price for Model 145 is $820 and the market price for Model 212 is $480, determine the profit or loss per unit for each model. (Round your final answers to 2 decimal places.) Model 145 Model 212 Price per unit Cost per unit Profit (loss) per unit
