Question

Exercise 17-8 Using the plantwide overhead rate to assess prices LO P1 Way Cool produces two different models of air conditioners. The company produces the mechanical systems in its components departmentThe mechanical systems are combined with the housing assembly in its finishing departmentThe activitiescostsand crivers 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 rateanswers to 2 decimal

Exercise 17-8 Using the plantwide overhead rate to assess prices LO P1 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, drivers associated with these two manufacturing processes and the production support process follow. (Loss amounts should indicated with a minus sign. Round your intermediate calculations and round "Cost per unit and OH rate" answers to 2 deci places.) Process Activity Components Changeover Machining Setups Driver Number of batches Machine hours Number of setups Quantity 910 7.580 160 Finishing Welding Inspecting Rework Overhead Cost $ 456,500 301,600 227,500 $985,600 $ 182,480 228,000 61.250 $ 472,150 $ 137,000 30,650 60,080 $ 227,730 Welding hours Number of inspections Rework orders 4,200 770 200 Support Purchasing Providing space Providing utilities Purchase orders Number of units Nunber of units 510 4,500 4,500 Additional production Information concerning its two product lines follows. Units produced Welding hours Batches Number of inspections Machine hours Model 145 1,500 1,400 455 450 2.280 Model 212 3,000 2,800 455 290 5.300

Answer 1

2) Model 145 Model 212 Total manufacturing cost per unit: Materials and labour Overhead 220.00 160.00 337.99 392.84 [2,280*$222.36/1,500] [5,300+$222.36/3,000] 557.99 552.84 Total manufacturing cost 3) 745 490 Profit/(Loss) per unit for each model: Market price Less : Total maufacturing cost Profit/(Loss) -557.99 -552.84 187.01 -62.84 CS Scanned with CamScanner