Question

Process Activity Components Changeover Machining Setups Quantity 930 7,700 200 Finishing Welding Inspecting Rework Overhead Cost Driver $451,000 Number of batches 300,800 Machine hours 227,000 Number of setups $978,800 $181,500 Welding hours 230,000 Number of inspections 60,150 Rework orders $471,650 $136,000 Purchase orders 32,400 Number of units 60,040 Number of units $228,440 5,700 850 210 Support Purchasing Providing space Providing utilities 540 5,700 5,700 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 1,900 2,400 465 505 2,300 Model 212 3,800 3,300 465 345 5,400 100 100 70 140 360 180

Answer 1

1. Computation of plant wide overhead rate.

2. Computation of total cost per unit for each product line.

3. Computation of the profit or loss per unit for each model.

Refer to the below images for more detailed solution.

Given the allocation base is Machine Hours Reqsivement plant wide overhead sate = Toral budgeted overhead cost Total budgeted Machine hours = $978800 + 471650 + $ 228440 7700 e$ 218.04 For Model 145 : plant wide overhead rate = $218004 Machine hours (MH) - 2300 hours Onits produced (up) = 1900 units By osing this information , overtread cost per unit for model 145 can be calculated as follows: in overhead cost = Machine hours plant wide overhead rate & Onits produced $ 218.04 X 2300 per unit 1900 - $263094 For model 212 . plant wide overhead rate machine hours (MA) units prodoced Cup) : $218.04 = - 5400 hours 3800 units. Overhead et cost per unit - plant wide overhead rate & = 1 218004 x 5400 3800 = 1309.85

ent @ : Total cost per unit for each product line : Requirement For model 145 - Direct labor y Overhead cost Materials per unit cost per unit for Model 145 = 300 = 4263.94 per onit for BY ofing Model 145 this information, the can be calwlated total cost as follows: Total cost per unit overhead cost per - Direct labor & materials cost & per unit Unit - [ 300 + $ 263.94 of 563.94 For Model 212 : Direct labor & Materials cost per unit = $150 overhead cost per unit for model 212 = 8 309.85 By using this information, the total cost per unit for Model 212 can be calolated as follows: : Total cost per unit = Direct labor y Materials & overhead cost cost per unit = $ 150 + $ 309.85 per unit = 2 459.85

of the profit Loss por unit for each Determination model: Regleiten- Requixement For model 145: Market price per unit (MP) = $ 753 Total cost per unit (TC) = 8563-94 By using this information, the total profit Model 145 per unit can be calwlated i profit = Market price - Total cost 753-1563.94 a $ 189006 per unit as from follows: For model 212 : Market price per unit (MP) = 1 430 Total cost per unit (TC) = 4459085 By using this information, the total profit Model 212 per unit can be calwlated as in profit - Market price - Total cost = $430 - $459.85 =-$29.85 per unit from follows: Therefore, $29.85 The total loss from represents a loss per unit. Model 212 per unit is $29.85