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. (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 Components Changeover Machining Setups Driver Number of batches Machine hours Number of setups Quantity 750 7,660 10e Finishing Welding Inspecting Rework Overhead Cost $ 459,500 301,400 227, 5ee $ 988,40 $ 182,300 224, eee 60,950 $ 467,250 $ 135,000 30, 25e 60,13e $225.380 Welding hours Number of inspections Rework orders 4,800 750 210 Support Purchasing Providing space Providing utilities Purchase orders Number of units Number of units 488 4, 20e 4,200 Additional production information concerning its two product lines follows.

Answer 1

Solution: 1) Overhead costs=988400+467250+225380 Machine hours 219.46 per machine hour 1681030 7660 2) 3621 Overhead Assigned Model 145 Model 212 Total manufacturing cost per unit: Materials and Labor Overhead Overhead Total manufacturing cost Activity Driver Plantwide OH rate Total Overhead Cost Units Produced OH Cost per unit 2310 219.46 506952.60 1400 362.11 5350 219.46 1174111.00 2800 419.33 Model 145 Model 212 280.00 210.00 362.11 419.33 642.11 629.33 3) Market price Manufacturing cost per unit Profit(loss) per unit Model 145 Model 212 748.00 510.00 642.11 629.33 105.89 -119.33