Question

Hi! I’m stuck on this problem

Way Cool produces two different models of air 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. Machining Setups 830 8, 110 80 373,871 147,200 $ 965,121 $ 319,280 303,525 32,200 s 655,005 Machine hours Number of setups Pinishing Welding Inspecting Revork Welding hours Number of inspections Rework orders 5,200 855 140 31,600 30,770 548 3,300 3,300 Providing space Number of units Number of units concerning its two product lines follows Model 145 1,100 2,200 Model 212 2,200 3,000 415 2,750 100 Required: . Using

Answer 1

Answer

• All working forms part of the answer
• Amounts are in $
• Requirement 1

						Model 145		Model 212
Activity	Expected Costs (A)	Expected Activity (B)		Activity Rates (C=A/B)		Activity Driver incurred (D)	Overhead assigned [C x D]	Activity Driver incurred (E )	Overhead assigned [C x E]
Components:
Changeover	444050	830	no. of batches	535	per no. of batches	415	222025	415	222025
Machining	373871	8110	machine hours	46.1	per machine hours	2750	126775	5360	247096
Setups	147200	80	setups	1840	per setups	40	73600	40	73600
Finishing:
Weilding	319280	5200	weilding hours	61.4	per weilding hours	2200	135080	3000	184200
Inspecting	303525	855	inspections	355	per inspections	475	168625	380	134900
Rework	32200	140	rework orders	230	per rework orders	100	23000	40	9200
Support:
Purchasing	213720	548	purchase orders	390	per purchase orders	365	142350	183	71370
Providing space and utilities	62370	3300	Units	18.9	per Units	1100	20790	2200	41580
						Total Overhead Cost	$912245		$983971
						Total Units produced	1100		2200
						Overhead cost per unit	$829.31		$447.26

• Requirement 2

	Model 145	Model 212
Material and Labor per unit	$               190.00	$              115.00
Overhead cost per unit	$               829.31	$              447.26
Total cost per unit	$           1,019.31	$              562.26

• Requirement 3

	Model 145	Model 212
Price per unit	$           1,019.84	$              562.59
Cost per unit	$           1,019.31	$              562.26
Profit (loss) per unit	$                   0.53	$                   0.33