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 $ 453,000 Number of batches 770 Machining 300,600 Machine hours 7,630 Setups 229,000 Number of setups 40 $ 982,600 Finishing Welding $ 181,200 Welding hours 3,500 Inspecting 232,000 Number of inspections 795 Rework 60,350 Rework orders 220 $ 473,550 Support Purchasing $ 135,500 Purchase orders 525 Providing space 31,700 Number of units 5,700 Providing utilities 60,070 Number of units 5,700 $ 227,270

Additional production information concerning its two product lines follows.

Model 145 Model 212 Units produced 1,900 3,800 Welding hours 1,000 2,500 Batches 385 385 Number of inspections 470 325 Machine hours 2,330 5,300 Setups 20 20 Rework orders 100 120 Purchase orders 350 175 1. Using a plantwide overhead rate based on machine hours, compute the overhead cost per unit for each product line. 0 2. 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 $110 for Model 212. Overhead Assigned Activity Driver Plantwide OH rate Total Overhead Cost Units Produced OH Cost per unit Model 145 $0 Model 212 $0 Model 145 Model 212 0 3. If the market price for Model 145 is $747 and the market price for Model 212 is $510, determine the profit or loss per unit for each model. Model 145 Model 212 Market price

Explanation / Answer

Way Cool Company (A) (B) (A)/(B) Process Overhead Cost Machine Hours Plant wide overhead rate based on machine hours Component $         9,82,600.00 Finishing $         4,73,550.00 Support $         2,27,270.00 $       16,83,420.00 7630 $                                                220.63 Total cost per unit of each of product line Model 145 Model 212 Material & Labor cost per unit $                   250.00 $               110.00 Overhead((2330*220.63)/1900) for Model 145 and( (5300*220.63)/3800) for Model 212 $                   270.56 $               307.72 Total cost per unit $                   520.56 $               417.72 Profit/Loss of each Model Model 145 Model 212 Market Price Per unit $                   747.00 $               510.00 Cost Per units $                   520.56 $               417.72 Profit/Loss $                   226.44 $                  92.28

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.