Question

Way Cool produces two different models of air conditioners. The company produces the mechanical systems in its 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 120 Overhead Cost Driver Quantity Number of $ 500,000 batches 279,000 Machine hours 6,000 225,000 Number of setups $1,004,000 $ 180,300 Welding hours 3,000 Number of 210,000 inspections 75.000 Rework orders 300 $ 465,300 $ 135,000 Purchase orders 450 32,000 Number of units 5,000 Tinioning Welding Inspecting 700 Rework Support Purchasing Providing space Providing utilities 65,000 Number of units 5,000 232,000 $ Additional production Information concerning its two product lines follows. Model 145 Model 212 1,500 3,500 800 2,200 400 300 1.800 4,200 Units produced Welding hours Batehen bero inspections Machine hours Setup Revork orders Purchase orders 400 400 60 60 160 140 300 150

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 per unit	250.00	180.00
Overhead	340.26	340.26
Total manufacturing cost	590.26	520.26
3
	Model 145	Model 212
Market price	820.00	480.00
Manufacturing cost per unit	590.26	520.26
Profit(loss) per unit	229.74	-40.26