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Exercise 4-8 Using departmental overhead rates to assess prices LO P2 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 Quantity 750 2,810 180 ProcessActivit Components Changeover Overhead Cont ver $ 470,000Sumber of batches Machining Setups 313,000Machine hours 232,000 mber of setups $1,015,000 5,200 815 230 Pinishing Welding S182,000elding hours Inspecting Revork 234,000Sumber of inspect ions 61,000Rework orders $477.000 $147 000 1 o0 $249,500 Purchase orders 31,500Mamber of unite Manber of units SupportPurchas ing 489 S,240 240 Providing space roviding utilities Additional production information concening its two product ines follows Model 145 1 Nodal 212 Unita produced Welding hours Batches Wumber of inspections Hachine hours Setup Rewor'k orders 2, 200 2, 000 395 485 2,550 90 100 326 3,200 330 $240 Purch ase order 163 Required: 1. Determine departmertal 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 af purchase orders 2. Determine the total cost per unit for each product ine if the direct labor and direct materials costs per unit are $210 for Model 145 and $110 for Model 212 3. If the market price for Model 145 is $1.475 afd the market price for Mocel 212 is $310, determine the profit or loss per unit for each model

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