Way Cool produces two different models of air conditioners. The company produces
ID: 2553821 • Letter: W
Question
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. Machining Setups 830 8, 110 80 373,871 147,200 $ 965,121 $ 319,280 303,525 32,200 s 655,005 Machine hours Number of setups Pinishing Welding Inspecting Revork Welding hours Number of inspections Rework orders 5,200 855 140 31,600 30,770 548 3,300 3,300 Providing space Number of units Number of units concerning its two product lines follows Model 145 1,100 2,200 Model 212 2,200 3,000 415 2,750 100 Required: . Using
Explanation / Answer
Answer
Model 145
Model 212
Activity
Expected Costs (A)
Expected Activity (B)
Activity Rates (C=A/B)
Activity Driver incurred (D)
Overhead assigned [C x D]
Activity Driver incurred (E )
Overhead assigned [C x E]
Components:
Changeover
444050
830
no. of batches
535
per no. of batches
415
222025
415
222025
Machining
373871
8110
machine hours
46.1
per machine hours
2750
126775
5360
247096
Setups
147200
80
setups
1840
per setups
40
73600
40
73600
Finishing:
Weilding
319280
5200
weilding hours
61.4
per weilding hours
2200
135080
3000
184200
Inspecting
303525
855
inspections
355
per inspections
475
168625
380
134900
Rework
32200
140
rework orders
230
per rework orders
100
23000
40
9200
Support:
Purchasing
213720
548
purchase orders
390
per purchase orders
365
142350
183
71370
Providing space and utilities
62370
3300
Units
18.9
per Units
1100
20790
2200
41580
Total Overhead Cost
$912245
$983971
Total Units produced
1100
2200
Overhead cost per unit
$829.31
$447.26
Model 145
Model 212
Material and Labor per unit
$ 190.00
$ 115.00
Overhead cost per unit
$ 829.31
$ 447.26
Total cost per unit
$ 1,019.31
$ 562.26
Model 145
Model 212
Price per unit
$ 1,019.84
$ 562.59
Cost per unit
$ 1,019.31
$ 562.26
Profit (loss) per unit
$ 0.53
$ 0.33
Model 145
Model 212
Activity
Expected Costs (A)
Expected Activity (B)
Activity Rates (C=A/B)
Activity Driver incurred (D)
Overhead assigned [C x D]
Activity Driver incurred (E )
Overhead assigned [C x E]
Components:
Changeover
444050
830
no. of batches
535
per no. of batches
415
222025
415
222025
Machining
373871
8110
machine hours
46.1
per machine hours
2750
126775
5360
247096
Setups
147200
80
setups
1840
per setups
40
73600
40
73600
Finishing:
Weilding
319280
5200
weilding hours
61.4
per weilding hours
2200
135080
3000
184200
Inspecting
303525
855
inspections
355
per inspections
475
168625
380
134900
Rework
32200
140
rework orders
230
per rework orders
100
23000
40
9200
Support:
Purchasing
213720
548
purchase orders
390
per purchase orders
365
142350
183
71370
Providing space and utilities
62370
3300
Units
18.9
per Units
1100
20790
2200
41580
Total Overhead Cost
$912245
$983971
Total Units produced
1100
2200
Overhead cost per unit
$829.31
$447.26
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