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.) Quantity Process Components Activity Changeover Machining Setups Driver Number of batches Machine hours Number of setups 7,630 Platabine Welding Inspecting Rework Overhead Cost $ 456,000 301,600 228,500 $ 986,100 S181,900 227.000 60,350 $469,750 • $ 115,000 31.650 60,970 $ 227,620 Welding hours Number of inspections Rework orders 4.000 870 11 Support Purchasing Providing space Providing utilities Purchase orders Number of units Number of units 570 5,700 5,700 Additional production information concerning its two product lines follows Model 145 Model 212 3.800 2,200 1.300 415 Units produced welding hours Ratches Number of inspections Machine hours Sets korders Purchase onders 5,300

Answer 1

1
Overhead costs	1683470	220.64	per machine hour
Machine hours	7630
2
Overhead Assigned	Activity Driver	Plantwide OH rate	Total Overhead Cost	Units Produced	OH Cost per unit
Model 145	2330	220.64	514091	1900	270.57
Model 212	5300	220.64	1169392	3800	307.73
Total manufacturing cost per unit:	Model 145	Model 212
Materials and Labor per unit	290.00	210.00
Overhead	270.57	307.73
Total manufacturing cost	560.57	517.73
3
	Model 145	Model 212
Market price	748.00	490.00
Manufacturing cost per unit	560.57	517.73
Profit(loss) per unit	187.43	-27.73
Note: Answers might vary + 0.01 due to rounding off