Way Cool produces two different models of air conditioners. The company produces
ID: 2556050 • 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.
Additional production information concerning its two product lines follows.
Required:
1. Using ABC, compute the overhead cost per unit for each product line.
2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $200 for Model 145 and $116 for Model 212.
3. If the market price for Model 145 is $557.32 and the market price for Model 212 is $337.14, determine the profit or loss per unit for each model.
Using ABC, compute the overhead cost per unit for each product line. (Round your final answers to 2 decimals places.)
Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $200 for Model 145 and $116 for Model 212. (Round your final answers to 2 decimal places.)
Total cost per unit
If the market price for Model 145 is $557.32 and the market price for Model 212 is $337.14, determine the profit or loss per unit for each model. (Round your final answers to 2 decimal places.)
Process Activity Overhead Cost Driver Quantity Components Changeover $ 461,250 Number of batches 750 Machining 380,765 Machine hours 8,050 Setups 148,400 Number of setups 80 $ 990,415 Finishing Welding $ 355,160 Welding hours 5,200 Inspecting 349,575 Number of inspections 885 Rework 57,500 Rework orders 250 $ 762,235 Support Purchasing $ 178,200 Purchase orders 540 Providing space 31,100 Number of units 7,800 Providing utilities 113,200 Number of units 7,800 $ 322,500Explanation / Answer
Answer
Model 145
Model 212
Activity
Expected Costs
Expected Activity
Activity Rate
Activity driver incurred
Overhead assigned
Activity driver incurred
Overhead assigned
Components
Changeover
461250
750
Number of batches
615
per Number of batches
375
230625
375
230625
Machining
3,80,765
8,050
Machine hours
47.3
per Machine hours
2,750
130075
5,300
250690
Setups
1,48,400
80
Setups
1855
per Setups
40
74200
40
74200
Finishing
Welding
355160
5,200
Welding hours
68.3
per Welding hours
1,400
95620
3,800
259540
Inspecting
3,49,575
885
Inspections
395
per Inspections
495
195525
390
154050
Rework
57,500
250
Rework orders
230
per Rework orders
150
34500
100
23000
Support
Purchasing
178200
540
Purchase orders
330
per Purchase orders
360
118800
180
59400
Providing space and utilities
1,44,300
7,800
Units
18.5
per Units
2,600
48100
5,200
96200
Total overhead cost
4927445
$1147705
Total units produced
2600
5200
Overhead cost per unit
$356.71
$220.71
Model 145
Model 212
Materials and Labor per unit
$200
$116
Overhead cost per unit
$356.71
$220.71
Total Cost per unit
$556.71
$336.71
Model 145
Model 212
Price per unit
$557.32
$337.14
Cost per unit
$556.71
$336.71
Profit (loss) per unit
$0.61
$0.43
Model 145
Model 212
Activity
Expected Costs
Expected Activity
Activity Rate
Activity driver incurred
Overhead assigned
Activity driver incurred
Overhead assigned
Components
Changeover
461250
750
Number of batches
615
per Number of batches
375
230625
375
230625
Machining
3,80,765
8,050
Machine hours
47.3
per Machine hours
2,750
130075
5,300
250690
Setups
1,48,400
80
Setups
1855
per Setups
40
74200
40
74200
Finishing
Welding
355160
5,200
Welding hours
68.3
per Welding hours
1,400
95620
3,800
259540
Inspecting
3,49,575
885
Inspections
395
per Inspections
495
195525
390
154050
Rework
57,500
250
Rework orders
230
per Rework orders
150
34500
100
23000
Support
Purchasing
178200
540
Purchase orders
330
per Purchase orders
360
118800
180
59400
Providing space and utilities
1,44,300
7,800
Units
18.5
per Units
2,600
48100
5,200
96200
Total overhead cost
4927445
$1147705
Total units produced
2600
5200
Overhead cost per unit
$356.71
$220.71
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.