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. Process Activity Components Changeover Machining Setups Quantity 930 8,200 120 Finishing Welding Inspecting Rework Overhead Cost Driver $ 655,650 Number of batches 377,200 Machine hours 226,800 Number of setups $1,259, 650 $ 288,150 Welding hours 275,625 Number of inspections 53,100 Rework orders $ 616,875 $ 205,200 Purchase orders 31,000 Number of units 124,400 Number of units $ 360,600 5,100 875 180 Support Purchasing Providing space Providing utilities 570 8,400 8,400 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 2,800 2,000 465 485 2,850 60 120 380 Model 212 5,600 3,100 465 390 5,350 60 60 190 nu

Answer 1

Required:1 Model 145 Model 212 Activity Drive incurred Overhead assigned Activity Drive incurred Overhead assigned Expected Costs Expected Activity Activity Rate 655650 377200 226800 930 Number of batches 8200 Machine hours 120 Number of setups 705.00 Per batch 46.00 Per Machine hour 1890.00 Per Setup 465 2850 60 327825 131100 113400 465 5350 60 327825 246100 113400 Activity Components: Change over Machining Setups Finishing: Welding Inspecting Rework Support: Purchasing Provide utilities 288150 275625 53100 5100 Welding hours 875 Number of inspections 180 Rework orders 56.50 Per Welding hour 315.00 Per Inspection 295.00 Per rework order 2000 485 113000 152775 35400 3100 390 60 175150 122850 17700 120 190) 205200 155400 570 Purchase orders 8400 Number of units 380 2800 5600 360.00 Per Purchase order 18.50 Per unit Total over head cost Total units produced Over head cost per unit 136800 51800 1062100 2800 379.32 68400 103600 1175025 5600 209.83

Required : 2 Materials and labor per unit Over head per unit Total cost Model 145 Model 212 210.000 122.00 379.32 209.83 589.32 331.83 Required :3 Price per unit Cost per unit Profit (loss ) Per Unit Model 145 Model 212 589.98 332.28 589.321 331.83| 0.66 0.45