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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 with
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 Overhead Cost Driver Quantity Components Changeover $ 556,95 Number of batches 790 Machining 355,431 Machine hours 7, 710 Setups 263,200 Number of setups 140 $1,175,581 Finishing Welding $ 270,500 Welding hours 5,000 Inspecting 283,900 Number of Inspections Resork 44.000 Rework orders 200 $ 598,40e Support Purchasing $ 194,250 Purchase orders 525 Providing space 31,000 Number of units 7,500 Providing utilities 113,750 Number of units 7,500 $ 339.00 Additional production information concerning its two product lines follows. Units produced Welding hours Batches Number of inspections Machine hours Model 145 2.500 300 395 515 2,350 70 150 Model 212 5,000 4,200 395 Rework onders Purchase orders 5,360 70 50 175 Required: 1. Using AEC, 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 $220 for Model 145 3. If the market price for Model 145 $599,54 and the market price for Model 212 is $34756, determine the profit or loss per unit for each model Complete this question by entering your answers in the tabs below
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