Chapter 17 Homework Question 2 (o 2.50 points Way Cool produces two different mo

Question

Chapter 17 Homework Question 2 (o 2.50 points 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.) Driver 730 7,520 160 Components Changeover $ 454,000 Number of batches Machining Setups 301,000 228,500 Machine hours Number of setups $ 983,500 Finishing Welding 4,500 810 190 S 181,400 Welding hours nspecting 233,000 Number of inspections 60,050 Rework orders s 474.450 SupportPurchasing S 134,500 Purchase orders Proidng space Providing utilities 30,400 Number of units 60,450 Number of units 6,000 6,000 s 225,350 Additional production information conceming its two product lines follows Units produced Welding hours Batches Number of inspections Machine hours Setups Rework onders Purchase orders 2,000 2,000 485 2270 80 130 370 4,000 2,500 365 325 5,250 80 60 185 Required:

Explanation / Answer

Part 1 Plantwide-Overhead cost per unit for each product line

Plant wide overhead rate based on machine houra

7520

(2270 + 5250)

$1683300

($983500 + $474450 + $225350)

Overhead per unit

(total overhead assigned/number of units)

$254.062

($508124/2000 units)

$293.79

($1175176/4000)

Total cost per unit

Calculation of profit/(loss)

Particulars Formaula Budgeted Overhead / Budgeted level of activity i.e. Machine hours Budgeted hours

7520

(2270 + 5250)

Budgeted Overhead

$1683300

($983500 + $474450 + $225350)

Plantwide overhead rate $223.84

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