Way Cool produces two different models of air conditioners. The company produces

Question

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. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations and round "Cost per unit and OH rate" answers to 2 decimal places.)

   
Additional production information concerning its two product lines follows.

Process Activity Overhead Cost Driver Quantity Components Changeover $ 454,000 Number of batches 790 Machining 301,200 Machine hours 7,640 Setups 229,500 Number of setups 140 $ 984,700 Finishing Welding $ 182,100 Welding hours 4,500 Inspecting 227,000 Number of inspections 780 Rework 60,300 Rework orders 200 $ 469,400 Support Purchasing $ 134,000 Purchase orders 510 Providing space 31,500 Number of units 4,800 Providing utilities 60,760 Number of units 4,800 $ 226,260

Explanation / Answer

1 Overhead costs 1680360 219.94 per machine hour Machine hours 7640 2 Overhead Assigned Activity Driver Plantwide OH rate Total Overhead Cost Units produced OH cost per unit Model 145 2340 219.94 514660 1600 321.66 Model 212 5300 219.94 1165682 3200 364.28 Total manufacturing cost per unit: Model 145 Model 212 Materials and Labor 220 190 Overhead 321.66 364.28 Total manufacturing cost 541.66 554.28 3 Model 145 Model 212 Market price 733 450 Manufacturing cost per unit 541.66 554.28 Profit(loss) per unit 191.34 -104.28

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