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 \$ 457,000 Number of batches 810 Machining 300,600 Machine hours 7,590 Setups 229,000 Number of setups 200 \$ 986,600 Finishing Welding \$ 181,800 Welding hours 5,900 Inspecting 225,000 Number of inspections 730 Rework 61,600 Rework orders 240 \$ 468,400 Support Purchasing \$ 135,500 Purchase orders 563 Providing space 32,250 Number of units 5,700 Providing utilities 60,700 Number of units 5,700 \$ 228,450

Additional production information concerning its two product lines follows.

 Model 145 Model 212 Units produced 1,900 3,800 Welding hours 2,400 3,500 Batches 405 405 Number of inspections 470 260 Machine hours 2,290 5,300 Setups 100 100 Rework orders 160 80 Purchase orders 375 188

Required:

Using a plant wide overhead rate based on machine hours, compute the overhead cost per unit for each product line.

Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are \$310 for Model 145 and \$140 for Model 212.

If the market price for Model 145 is \$755 and the market price for Model 212 is \$470, determine the profit or loss per unit for each model.

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