Question

Way Cool produces two different models of alr 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 Components Activity Changeover Machining Setups Driver Number of batches Machine hours Number of setups Quantity 930 7.660 88 Finishing Welding Inspecting Rework Overhead Cost $ 457.500 388,488 228.500 $ 986,480 $ 181,380 229.000 62.480 $ 478.788 $ 137,500 31.300 60,680 $ 229,488 Welding hours Number of inspections Rework orders 5.ee 735 298 Support Purchasing Providing space Providing utilities Purchase orders Number of units Number of units 548 6,300 6,300 Additional production Information concerning its two product lines follows. Model 212 4,200 2,800 Model 145 2,100 2,288 465 470 2,310 Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders 465 265 5,350 160 130 365 183 Required: 1. Using a plantwide overhead rate based on machine hours, compute the overhead cost per unit for each product line 2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $280 for Model 145 and $110 for Model 212. Activity Overhead Assigned Plantwide OH Total Overhead Cost Units Produced 2 Driver rate Total Overhead Cost OH Cost per unit Model 145 Model 212 Model 145 Model 212 3. If the market price for Model 145 is $747 and the market price for Model 212 is $490, determine the profit or loss per unit for each model. Model 145 Model 212 Market price

Answer 1

1
Overhead costs	1686500	220.17	per machine hour
Machine hours	7660
2
Overhead Assigned	Activity Driver	Plantwide OH rate	Total Overhead Cost	Units Produced	OH Cost per unit
Model 145	2310	220.17	508593	2100	242.19
Model 212	5350	220.17	1177910	4200	280.45
Total manufacturing cost per unit:	Model 145	Model 212
Materials and Labor per unit	280.00	110.00
Overhead	242.19	280.45
Total manufacturing cost	522.19	390.45
3
	Model 145	Model 212
Market price	747.00	490.00
Manufacturing cost per unit	522.19	390.45
Profit(loss) per unit	224.81	99.55
Workings:
Overhead costs	1686500	=986400+470700+229400