Question

Check my wo Way Cool produces two different models of air conditioners. The company produces the mechanical systems in its 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 $ 459, 500 300, 800 227, 500 Driver Quantity Componenta Changeover Machining Setupa Number of batches 750 Machine hours 7,640 Number of setupa 60 $ 987, 800 3, 500 775 Finishing Welding Inspecting Rework $101, 700 226, 000 61,900 Welding hours Number of inspections 210 Rework ordera $469, 600 $135,000 31, 500 60,830 6 227, 330 Purchane ordera 165 Purchasing Providing apace Support 4, 500 4, 500 Number of unita Number of unita Providing utilities Additional production information concerning its two product lines follows. Model 212 3,000 2, s00 375 320 Model 145 1, 500 1,000 Unita produced Welding hours Batches 375 455 Number of inspectiona

Answer 1

1)
Overhead costs	$      1,684,730	$              220.51	per machine hour
Machine hours	7,640
2)
Overhead assigned	Activity Driver	Plant-wide OH rate	Total Overhead cost	Unit produced	OH Cost per unit
Model 145	2,290	$              220.51	$                504,968	1,500	$          336.65
Model 212	5,350	$              220.51	$             1,179,729	3,000	$          393.24
Total manufacturing cost per unit:		Model 145	Model 212
Materials and labor		$              230.00	$                  120.00
Overhead		336.65	393.24
Total Manufacturing cost		$              566.65	$                  513.24
3)
		Model 145	Model 212
Market price		$              755.00	$                  490.00
Manufacturing cost per unit		(566.65)	(513.24)
Profit/(loss) per unit		$              188.35	$                   (23.24)
Working Notes:
Overhead costs
Components	987,800
Finishing	469,600
Support	227,330
Overhead costs	1,684,730