Question

Question 4:

Under the required 2 tab: Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $250 for Model 145 and $122 for Model 212. (Round your final answers to 2 decimal places.)

Under the required 3 tab: If the market price for Model 145 is $710.99 and the market price for Model 212 is $377.51, determine the profit or loss per unit for each model. (Round your final answers to 2 decimal places.)

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. Process Activity Components Changeover Machining Setups Driver Number of batches Machine hours Number of setups Quantity 870 8,280 80 Finishing Welding Inspecting Rework Overhead Cost $ 491,550 389,988 146,000 $1,027,538 $ 330, 120 349,575 33,600 Ş 713, 295 $ 178, 200 30,700 88,370 $ 297,270 Welding hours Number of inspections Rework orders 6,300 885 160 Support Purchasing Providing space Providing utilities Purchase orders Number of units Number of units 495 6,300 6,300 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 2,100 2,600 435 495 2,950 40 90 330 Model 212 4,200 3,700 435 390 5,330 40 70 165

Answer 1

ANSWER:

Required 1)

Activity	Expected Costs	Expected Activity	Activity Rate	Model 145	Model 212
Activity Driver Incurred	Overhead Assigned	Activity Driver Incurred	Overhead Assigned
	(a)	(b)		(c = a / b)		(d)	(c * d)	(e)	(c * e)
Components:
Changeover	491,550	870	Number of Batches	565	per batch	435	245,775	435	245,775
Machining	389,988	8,280	Machine hours	47.1	per machine hour	2,950	138,945	5,330	251,043
Setups	146,000	80	Number of setups	1,825	per set up	40	73,000	40	73,000
Finishing:
Welding	330,120	6,300	Welding Hours	52.4	per welding hour	2,600	136,240	3,700	193,880
Inspecting	349,575	885	Number of Inspection	395	per inspection	495	195,525	390	193,050
Rework	33,600	160	Rework Orders	210	per rework order	90	18,900	70	14,700
Support:
Purchasing	178,200	495	Purchase Ordes	360	per purchase order	330	118,800	165	59,400
Providing Space and Utilities	119,070	6,300	Number of units	18.9	per unit	2,100	39,690	4,200	79,380
				Total Overhead Costs (f)		966,875		1,110,228
				Total Units Produced (g)		2,100		4,200
				Overhead Cost per unit (f / g)		460.41		264.34

Required 2)

	Model 145	Model 212
Materials and Labor per unit (A)	250	122
Overhead Cost per unit (B)	460.41	264.34
Total Cost per unit (A + B)	710.41	386.34

Required 3)

	Model 145	Model 212
Price per unit (A)	710.99	377.51
Less: Cost per unit	(710.41)	(386.34)
Profit (Loss) per unit	0.58	(8.83)