Way Cool produces two different models of air conditioners. The company produces the mechanical systems...
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Accounting
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. (Round your intermediate calculations and round "Cost per unit and OH rate" answers to 2 decimal places.)
Process
Activity
Overhead Cost
Driver
Quantity
Components
Changeover
$
459,500
Number of batches
810
Machining
301,600
Machine hours
7,680
Setups
227,500
Number of setups
80
$
988,600
Finishing
Welding
$
180,500
Welding hours
4,900
Inspecting
222,000
Number of inspections
815
Rework
60,700
Rework orders
230
$
463,200
Support
Purchasing
$
135,500
Purchase orders
525
Providing space
31,550
Number of units
4,800
Providing utilities
60,110
Number of units
4,800
$
227,160
Additional production information concerning its two product lines follows.
Model 145
Model 212
Units produced
1,600
3,200
Welding hours
2,000
2,900
Batches
405
405
Number of inspections
485
330
Machine hours
2,280
5,400
Setups
40
40
Rework orders
130
100
Purchase orders
350
175
Required:
1. Using a plantwide 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 products line if the direct labor and direct materials costs per unit are $200 for Model 145 and $130 for Model 212.
Overhead Assigned
Activity Driver
Plantwide OH rate
Total Overhead Cost
Units Produced
OH Cost per unit
Model 145
$0
Model 212
$0
Model 145
Model 212
0
3. Assume if the market price for Model 145 is $732 and the market price for Model 212 is $490, determine the profit or loss per unit for each model.
Model 145
Model 212
Market price
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