Question

Chp 17 Homework 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 Components activity Changeover Machining Setues Overhead Cost $ 458,00 305, 225,00 Driver Number of batches Machine hours Number of setups 930 8.430 Welding Inspecting welding hours Number of inspections Rework orders 4,100 890 180 Support Purchasing Providing space Providing utilitiet $186. 224, 66,00 $ 74. $141.00 33,500 61.00 $ 35. Purchase orders Number of units Number of units 4,690 4.690 Additional production information concerning its two product lines follows del 345 Model 212 3.090 2.900 welding hours Batches Number of inspections Mach hour 1. 520 3,150 5.250 ot < Prox 2 of 4 Next >

Answer 1

Solution 1:

Computation of Departmental Overhead rates and overhead cost per unit
Department	Overhead cost	Allocation Base	Qty of allocation base	Overhead rate	Model 145		Model 212
					Activity Driver	Allocated Overhead cost	Activity Driver	Allocated Overhead cost
Components	$988,000.00	Machine hours	8430	$117.20	3150	$369,181	5280	$618,819
Finishing	$474,000.00	Welding hours	4300	$110.23	1400	$154,326	2900	$319,674
Support	$235,500.00	Purchase orders	471	$500.00	314	$157,000	157	$78,500
Total						$680,507		$1,016,993
Nos of units						1600		3090
Overhead cost per unit						$425.32		$329.12

Solution 2:

Computation of Per unit Cost
Particulars	Model 145	Model 212
Direct material and labor	$300.00	$200.00
Overhead cost per unit	$425.32	$329.12
Cost per unit	$725.32	$529.12

Solution 3:

Computation of Profit (Loss) per unit
Particulars	Model 145	Model 212
Selling price per unit	$1,325.00	$300.00
Cost per unit	$725.32	$529.12
Profit (Loss) per unit	$599.68	-$229.12

Note: Distribution of purchase order on both model is missing in question , i assumed that 314 and 157 purchase orders for Model 145 and 212 respectively. If questions figures are different then answer will change accordingly. Please do not downvote due to incomplete information.