Way Cool produces two different models of air conditioners. The company produces
ID: 2540491 • 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 a minus sign. Round your intermediate calculations and round "Cost per unit and OH rate" answers to 2 decimal places.) Quantity ProcessActivity Components Changeover Overhead Cost Driver 456,500 301,200 227,000 $984,700 181,600 229,000 61,050 $471,650 136,500 30,250 60,900 $227,650 Machining Setups Number of batches Machine hours Number of setups 850 7,750 140 Finishing Welding Inspecting Rework Welding hours Number of inspections Rework orders 3,300 775 140 Purchasing Providing space Providing utilities Support Purchase orders Number of units Number of units 533 5,100 5,100 Additional production information concerning its two product lines follows. Model 145 Model 212 Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders 1,700 1,200 425 520 2,300 70 70 355 3,400 2,100 425 255 5,450 70 70 178Explanation / Answer
1) overhead costs 1684000 217.29 per machine hour Machine hours 7,750 2) Overhead assigned Activity plantwide total oh units OH cost driver OH rate cost produced per unit Model 145 2,300 217.29 499768 1,700 293.98 model 212 5,450 217.29 1184232 3,400 348.30 total manufacturing cost Model 145 Model 212 per unit Materials and labor 310 190 overhead 293.98 348.30 total manufacturing cost 603.98 538.30 3) Model 145 Model 212 Market price 739 490 manufacturing cost per unit 603.98 538.30 profit (loss)per unit 135.02 -48.30
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