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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 Components Changeover Machining Setups Quantity 910 7,800 60 Finishing Welding Inspecting Rework Overhead Cost Driver $ 514,150 Number of batches 360,360 Machine hours 108,600 Number of setups $ 983, 110 $ 412,360 Welding hours 326,250 Number of inspections 50,350 Rework orders $ 788,960 $ 189,000 Purchase orders 32,000 Number of units 49,060 Number of units $ 270,060 6,100 870 190 Support Purchasing Providing space Providing utilities 540 4,200 4,200 Additional production information concerning its two product lines follows. Model 145 Model 212 Units produced 1,400 2,800 Welding hours 2,400 3,700 Batches 455 455 Number of inspections 500 370 Machine hours 2,450 5,350 Setups 30 30 Rework orders 140 50 Purchase orders 360 180 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 $220 for Model 145 and $112 for Model 212. 3. If the market price for Model 145 is $909.53 and the market price for Model 212 is $497.29, determine the profit or loss per unit for each model. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 1 Check my work Required 2 Required 3 Using ABC, compute the overhead cost per unit for each product line. (Round your final answers to 2 decimal places.) Expected Costs Expected Activity Activity Rate Mode Activity driver incurred $ 514,150 360,360 108,600 910 Number of batches 7,800 Machine hours 60 Setups Activity Components Changeover Machining Setups Finishing Welding Inspecting Rework Support Purchasing Providing space and utilities $ 412,350 326,250 50,350 6,100 Welding hours 870 Inspections 190 Rework orders $ 189,000 81,060 540 Purchase orders 4,200 Units Total overhead cost 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 $220 for Model 145 and $112 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 $909.53 and the market price for Model 212 is $497.29, 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
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