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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 Overhead Cost Driver Quantity
Components Changeover $ 452,000 Number of batches 830
Machining 301,000 Machine hours 8,490
Setups 229,000 Number of setups 100

$ 982,000

Finishing Welding $ 190,000 Welding hours 5,400
Inspecting 226,000 Number of inspections 805
Rework 61,500 Rework orders 230

$ 477,500

Support Purchasing $ 139,000 Purchase orders 501
Providing space 31,000 Number of units 4,930
Providing utilities 68,000 Number of units 4,930

$ 238,000

Additional production information concerning its two product lines follows.

Model 145 Model 212
Units produced 1,900 3,030
Welding hours 1,600 3,800
Batches 415 415
Number of inspections 455 350
Machine hours 3,150 5,340
Setups 50 50
Rework orders 160 70
Purchase orders 334 167

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.(Round your intermediate calculations and per unit cost answers to 2 decimal places.)

Components department
Finishing department
Support department
Model 145 Activity Driver Departmental OH Rate Total Overhead Cost
Components
Finishing
Support
Model 212 Activity Driver Departmental OH Rate Total Overhead Cost
Components
Finishing
Support

Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $240 for Model 145 and $160 for Model 212. (Round your intermediate calculations and cost per unit answers to 2 decimal places.)

Model 145 Model 212
Materials and Labor per unit
Overhead per unit
Total cost per unit

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