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 assemble) in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow.

Additional production information concerning its two product lines follows.

Required
1. I sing a plant wide overhead rate based on machine hours, 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. Comment on the results.

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Process Activity Overhead Cost Driver Quantity 800 6,000 120 Components Changeover $ 500,000 279,000 225,000 $1,004,000 Number of batches Machine hours Number of setups Machining Setups Finishing Welding Inspecting Rework $180,300 210,000 75,000 465,300 Welding hours Number of inspections Rework orders 3,000 700 300 Purchasing Providing space Providing utilities 135,000 32,000 65,000 $232,000 450 5,000 5,000 Support Purchase orders Number of units Number of units Model 145 Model 212 1,500 800 400 400 1,800 60 160 300 3,500 2,200 400 300 4,200 60 140 150 Units produced Welding hours... Batches Number of inspections .. _ . _ . . Rework orders Purchase orders . . ..