Activity Process Components Changeover Quantity 750 8,440 60 Overhead Cost Drive

Question

Activity Process Components Changeover Quantity 750 8,440 60 Overhead Cost Driver Machining Setups $458,000 305,000 230,000 Number of batches Machine hours Number of setups $ 993,000 5,400 855 160 Finishing Welding $ 190,000 Welding hours 225,000 Number of inspections Inspecting Rework 63,000 Rework orders $478,000 $145,000 33,500 62,000 501 5,120 5,120 Support Purchasing Providing space Providing utilities Purchase orders Number of units Number of units $240,500 Additional production information concerning its two product lines follows Model 145 2,100 2,200 375 Model 212 Units produced Welding hours Batches Number of 3,020 3,200 375 515 3,150 30 90 334 340 inspections Machine hours Setups Rework orders Purchase orders 5,290 30 70 167

Explanation / Answer

Solution:

These are two questions having different company name. I am providing the solution for first question..

Company Name --- WAY COOL

Part 1-1 --- Plantwide Overhead Rate based on machine hours ---- It is correctly calculated.

Part 1-2 --- Determine the total cost per unit for each product line

Overhead Assigned

Activity Driver

Plantwide OH rate

(as calculated above)

Total Overhead Cost

Units Produced

OH Cost per unit

Model 145

2260

(given)

$219.34

$495,708.40

(2260*219.34)

2000

(given)

$247.85

($495,708.40 / 2,000)

Model 212

5400

(given)

$219.34

$1,184,436.00

(5400*219.34)

4000

(given)

$296.11

($1,184,436 / 4,000)

Model 145

Model 212

Direct labor and direct material cost per unit

$260.00

$190.00

OH Cost per unit

$247.85

$296.11

Total Cost per unit

$507.85

$486.11

Part 1-3 --- Profit or loss per unit

Model 145

Model 212

Market Price

$731.00

$450.00

Total Cost per unit

$507.85

$486.11

Profit or (loss) per unit

(Market Price - total cost)

$223.15

($36.11)

Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you

Please ask separate question for remaining

Overhead Assigned

Activity Driver

Plantwide OH rate

(as calculated above)

Total Overhead Cost

Units Produced

OH Cost per unit

Model 145

2260

(given)

$219.34

$495,708.40

(2260*219.34)

2000

(given)

$247.85

($495,708.40 / 2,000)

Model 212

5400

(given)

$219.34

$1,184,436.00

(5400*219.34)

4000

(given)

$296.11

($1,184,436 / 4,000)

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