Way Cool produces two different models of air conditioners. The company produces
ID: 2514596 • Letter: W
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 ? minus sign. Round your intermediate calculations and round "Cost per unit and OH rate" answers to 2 decimal places.) Process Activity Overhead Cost Driver Quantity S 458,500 300,600 227,500 $ 978,600 Number of batches Machine hours Number of setups 818 7,660 160 Machining Setups Finishing Welding 4,100 800 220 182,080 Welding hours Inspecting Rework 225,000 Number of inspections 467,958 137,000 Purchase orders 60,950 Rework order:s Purchasing Providing space Providing utilities Support 30,25 Number of units 60,430 548 6,300 6,300 Number of units 227,680 Additional production information concerning its two product lines follows Model 145 Model 212 Units produced Helding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders 2,100 1,800 485 505 2,260 80 100 365 4,200 2,300 405 295 5,400 80 120 183Explanation / Answer
1) overhead costs 1674230 218.57 per machine hour Machine hours 7,660 2) Overhead assigned Activity plantwide total oh units OH cost driver OH rate cost produced per unit Model 145 2,260 218.57 493963 2,100 235.22 model 212 5,400 218.57 1180267 4,200 281.02 total manufacturing cost Model 145 Model 212 per unit Materials and labor 290 150 overhead 235.22 281.02 total manufacturing cost 525.22 431.02 3) Model 145 Model 212 Market price 732 460 manufacturing cost per unit 525.22 431.02 profit (loss)per unit 206.78 28.98
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