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 Process Activity Components Changeover Overhead Cost Driver Quantity $ 408,750 362, 858 260,400 $1,032,008 $ 269,990 326,250 29,400 $ 625, 640 $ 139,500 31,300 86,510 $ 257,310 Machining Setups Number of batches Machine hours Number of setups 750 7,940 140 4,900 870 140 Finishing Welding Inspecting Rework Welding hours Number of inspections Rework orders Purchasing Providing space Providing utilities 465 6,300 6,300 Support Purchase orders Number of units Number of units 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 2,100 1,200 375 470 2,650 70 80 310 4,200 3,700 375 400 5,290 70 60 155

Explanation / Answer

Model 145 model 212 Activity Expected Expected activity Activity rate Activity oh Activity oh costs driver assigned driver assigned Components Changeover 408,750 750 no batches 545 no batches 375 204375 375 204375 Machining 362,858 7,940 MH's 45.7 MH's 2,650 121105 5,290 241753 Setups 260,400 140 no setups 1860 no setups 70 130200 70 130200 Finishing Welding 269,990 4,900 welding hrs 55.1 welding hrs 1,200 66120 3,700 203870 Inspecting 326,250 870 no inspections 375 no inspections 470 176250 400 150000 Rework 29,400 140 Re orders 210 Re orders 80 16800 60 12600 Support Purchasing 139,500 465 pur orders 300 pur orders 310 93000 155 46500 providing space&yutilit 117,810 6,300 no units 18.7 no units 2,100 39270 4,200 78540 1,914,958 total oh 847120 1067838 units produced 2,100 4,200 oh cost per unit 403.39 254.25 model 145 model 212 2) Materials and labor per unit 250.00 112.00 overhead cost per unit 403.39 254.25 total cost per unit 653.39 366.25 3) model 145 model 212 price per unit 653.9 366.65 cost per unit 403.39 254.25 profit(loss)per unit 250.51 112.40

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