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 Quantity 910 7,700 80 Finishing Welding Inspecting Rework Overhead Cost Driver $ 451,500 Number of batches 301,400 Machine hours 227,500 Number of setups $ 980,400 $ 180,300 Welding hours 229,000 Number of inspections 60, 350 Rework orders $ 469,650 $ 135,000 Purchase orders 31,350 Number of units 60,800 Number of units $ 227, 150 4,300 785 300 Support Purchasing Providing space Providing utilities 555 4,500 4,500 Additional production information concerning its two product lines follows. Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders Model 145 1,500 1,800 455 470 2,300 49 170 370 Model 212 3,000 2,500 455 315 5,400 40 130 185

Answer 1

1
Overhead costs	1677200	217.82	per machine hour
Machine hours	7700
2
Overhead Assigned	Activity Driver	Plantwide OH rate	Total Overhead Cost	Units Produced	OH Cost per unit
Model 145	2300	217.82	500986	1500	333.99
Model 212	5400	217.82	1176228	3000	392.08
Total manufacturing cost per unit:	Model 145	Model 212
Materials and Labor per unit	260.00	190.00
Overhead	333.99	392.08
Total manufacturing cost	593.99	582.08
3
	Model 145	Model 212
Market price	743.00	460.00
Manufacturing cost per unit	593.99	582.08
Profit(loss) per unit	149.01	-122.08