Question

ercise 04-8 Using the plantwide overhead rate to assess prices LO P1 By Cool produces two different models of air conditioners. The company produces the mechanical systems in its components epartment. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and vers associated with these two manufacturing processes and the production support process follow. (Loss amounts should be ndicated with a minus sign. Round your intermediate calculations and round "Cost per unit and OH rate" answers to 2 decimal places.) Process Components Activity Changeover Machining Setups Driver Number of batches Machine hours Number of setups Quantity 878 7,670 160 Finishing Welding Inspecting Rework Overhead Cost $ 457,500 301,000 227.500 $986,000 $ 132,900 225.000 60,500 $ 471,400 $ 137,500 30,390 60.40 $ 228,330 Welding hours Number of inspections Rework orders 4.800 790 200 Support Purchasing Providing space Providing utilities Purchase orders Number of units Number of units 6.000 Additional production information concerning its two product lines follows Model 145 2.000 1.400 435 Model 212 4.00 3.400 Units produced Welding hours Batches tuber of inspections Machine Hours 10 2.320 380 5,350 Rework orders Durchase orders 145 173 Required: 1. Using a plantwide overhead based on machine hours, compute the overhead cost per unit for each product line bacts5 Machine hours 1585230 S 7 670 219 78 per machine how 2. Det the total cost per un for each product 5190 to Model 212 the decor and direct materials costs p a r 5260 for Model 145 and Overhead Assigned Activity Driver Plate 2.2015 Hate Total Overhead Cost Units Produced on Cost per unit 219.783 509,6901 2000 s

Answer 1

Solution:

ZR SK Overhead cost machine hours Product Model 145 Model 212 $1,685,730 $219.78 Per DLH 7670 activity driver Plant wide OH Rate Total Overhead Cost Units produced OH Cost per unit 2320 $219.78 $509,890 2000 $254.94 5350 $219.78 $1,175,823 4000 $293.96 12 13 15 16 Direct materials and direct labor Overhead Model 145 Model 212 260.00 254.94 17 190.000 293.96 total cost per unit 514.94 483.96 26 27 28 et456 ) Sheet457 Sheet458 ) Sheet459 Sheet279 (2) Sheet461 Sheet462 Sheet463