Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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 Overhead Cost Driver Quantity 870 8,710 180 S 464,000 311,000 228,000 $1,003,000 $ 192,000 221,000 60,500 $ 473,500 $ 141,000 38,000 67,000 $ 246,000 Machining Setups Number of batches Machine hours Number of setups welding hours Number of inspections Rework orders Finishing elding 6,100 850 Inspecting Rework 150 Purchasing Providing space Providing utilities Support Purchase orders Number of units Number of units 5,150 5,150 Additional production Information concerning its two product lines follows. Model 145 Model 212 Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders 2,100 2,200 435 480 3,350 90 90 3,050 3,900 435 370 5,360 90 60 179 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 materlals costs per unit are $210 for Model 145 and $210 for Model 212. 3. If the market price for Model 145 Is $2,000 and the market price for Model 212 is $290, determine the profit or loss per unit for each model
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started