90.2K

Verified Solution

Link Copied!

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	Overhead Cost				Driver	Quantity
Components	Changeover		$	462,000		Number of batches	810
	Machining			301,000		Machine hours	8,560
	Setups			231,000		Number of setups	40
			$	994,000
Finishing	Welding		$	186,000		Welding hours	5,600
	Inspecting			224,000		Number of inspections	840
	Rework			63,000		Rework orders	200
			$	473,000
Support	Purchasing		$	137,000		Purchase orders	471
	Providing space			37,000		Number of units	5,240
	Providing utilities			64,000		Number of units	5,240
			$	238,000

Additional production information concerning its two product lines follows.

	Model 145			Model 212
Units produced		2,200			3,040
Welding hours		1,600			4,000
Batches		405			405
Number of inspections		480			360
Machine hours		3,250			5,310
Setups		20			20
Rework orders		80			120
Purchase orders		314			157

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. 2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $290 for Model 145 and $190 for Model 212. 3. If the market price for Model 145 is $1,550 and the market price for Model 212 is $280, 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 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 $ 994.000 0 Finishing department $ 473.000 0 Support department $ 238,000 Model 145 Activity Driver Departmental OH Rate Total Overhead Cost $ 0 Components Finishing Support $ 0 0 Activity Driver Departmental OH Rate Total Overhead Cost 0 Model 212 Components Finishing Support $ $ 0 0 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 $290 for Model 145 and $190 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 cost per unit Total cost per unit Required 1 Required 2 Required 3 If the market price for Model 145 is $1,550 and the market price for Model 212 is $280, determine the profit or loss per unit for each model. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations and final answers to 2 decimal places.) Model 145 Model 212 Market price per unit Cost per unit Profit (loss) per unit

Answer & Explanation Solved by verified expert

See Answer