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 Overhead Cost Driver Quantity Components Changeover $ 500,000 Number of batches 800 Machining 279,000 Machine hours 6,000 Setups 225,000 Number of setups 120 $ 1,004,000 Finishing Welding $ 180,300 Welding hours 3,000 Inspecting 210,000 Number of inspections 700 Rework 75,000 Rework orders 300 $ 465,300 Support Purchasing $ 135,000 Purchase orders 450 Providing space 32,000 Number of units 5,000 Providing utilities 65,000 Number of units 5,000 $ 232,000 Additional production information concerning its two product lines follows. Model 145 Model 212 Units produced 1,500 3,500 Welding hours 800 2,200 Batches 400 400 Number of inspections 400 300 Machine hours 1,800 4,200 Setups 60 60 Rework orders 160 140 Purchase orders 300 150 1. Using a plantwide overhead rate based on machine hours, compute the overhead cost per unit for each product line. Overhead costsselected answer correct $1,701,300selected answer correct $283.55 per machine hourselected answer correct Machine hoursselected answer correct 6,000selected answer correct 2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $250 for Model 145 and $180 for Model 212. Overhead Assigned Activity Driver Plantwide OH rate Total Overhead Cost Units Produced OH Cost per unit Model 145 1,800selected answer correct $340.26selected answer incorrect $612,468?

Answer 1

1
Overhead costs	1701300	283.55	per machine hour
Machine hours	6000
2
Overhead Assigned	Activity Driver	Plantwide OH rate	Total Overhead Cost	Units Produced	OH Cost per unit
Model 145	1800	283.55	510390	1500	340.26
Model 212	4200	283.55	1190910	3500	340.26
Total manufacturing cost per unit:	Model 145	Model 212
Materials and Labor	250.00	180.00
Overhead	340.26	340.26
Total manufacturing cost	590.26	520.26