Question

# Way Cool produces two different models of air conditioners. The company produces the mechanical systems in...

 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. (Loss amounts should be indicated with a minus sign. 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 \$ 458,500 Number of batches 770 Machining 300,800 Machine hours 7,560 Setups 228,000 Number of setups 140 \$ 987,300 Finishing Welding \$ 181,800 Welding hours 5,500 Inspecting 229,000 Number of inspections 770 Rework 61,800 Rework orders 200 \$ 472,600 Support Purchasing \$ 137,500 Purchase orders 525 Providing space 31,600 Number of units 4,800 Providing utilities 60,220 Number of units 4,800 \$ 229,320

 Additional production information concerning its two product lines follows.

 Model 145 Model 212 Units produced 1,600 3,200 Welding hours 2,000 3,500 Batches 385 385 Number of inspections 460 310 Machine hours 2,260 5,300 Setups 70 70 Rework orders 70 130 Purchase orders 350 175
 1. Using a plantwide overhead rate based on machine hours, compute the overhead cost per unit for each product line. 0 2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are \$190 for Model 145 and \$110 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 \$737 and the market price for Model 212 is \$500, determine the profit or loss per unit for each model. Model 145 Model 212 Market price

 1 Overhead costs 1689220 223.44 per machine hour Machine hours 7560 2 Overhead Assigned Activity Driver Plantwide OH rate Total Overhead Cost Units Produced OH Cost per unit Model 145 2260 223.44 504974 1600 315.61 Model 212 5300 223.44 1184232 3200 370.07 Total manufacturing cost per unit: Model 145 Model 212 Materials and Labor per unit 190.00 110.00 Overhead 315.61 370.07 Total manufacturing cost 505.61 480.07 3 Model 145 Model 212 Market price 737.00 500.00 Manufacturing cost per unit 505.61 480.07 Profit(loss) per unit 231.39 19.93

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