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 Driver Number of batches Machine hours Number of setups Quantity 810 7,510 120 Finishing Welding Inspecting Rework Overhead Cost $ 453,000 301,200 227,000 $ 981,200 $ 182,600 226,000 61,300 $ 469,900 $ 136,500 31,450 60,840 $ 228,790 Welding hours Number of inspections Rework orders 3.900 750 150 Support Purchasing Providing space Providing utilities Purchase orders Number of units Number of units 533 4,500 4,500 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 1,500 1,600 405 475 2,260 60 90 355 Model 212 3,000 2,300 405 275 5,250 60 60 178 Required: 1. Using a plantwide overhead rate based on machine hours, compute the overhead cost per unit for each product line.

Answer 1

A B с D E F 1 1) 2 Overhead costs $ 1,679,890$ 223.69 per Machine hour 3 Machine hours 7510 4 5 2) 6 Overhead Assigned Activity Driver Plantwide OH rate Total Overhead Cost Units Produced OH Cost per unit 7 Model 145 2,260 $ 223.69 $ 505,539 1,500 $ 337.03 8 Model 212 5,250 $ 223.69 $ 1,174,373 3,000 $ 391.46 9 10 Model 145 Model 212 11 Materials and Labor per unit $ 230$ 170 12 Overhead per unit $ 337.03 $ 391.46 13 Total cost per unit $ 567.03 $ 561.46 14 15 3) 16 Model 145 Model 212 17 Market price $ 745$ 450 18 Cost per unit $ 567.03 $ 561.46 19 Profit(loss) per unit $ 177.97 $ -111.46

А B с D E F 1 1) 2 Overhead costs =981200+469900+228790 --B2/B3 per Machine hour 3 Machine hours 7510 4 5 2) 6 Overhead Assigned Activity Driver Plantwide OH rate Total Overhead Cost Units Produced OH Cost per unit 7 Model 145 2260 223.69 =+B7*C7 1500 =+D7/E7 8 Model 212 5250 223.69 =+B8*C8 3000 =+D8/E8 9 10 Model 145 Model 212 11 Materials and Labor per unit 230 170 12 Overhead per unit 337.03 391.46 13 Total cost per unit =+B11+B12 =+C11+C12 14 15 3) 16 Model 145 Model 212 17 Market price 745 450 18 Cost per unit 567.03 561.46 19 Profit(loss) per unit =+B17-B18 =+C17-C18