Question

Way Cool produces two different models of air conditioners. The company produces the mechanical systems in its 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.) Process Activity Components Chang.cover Machining Setups Quantity 800 6,099 120 Finishing Welding Inspecting Rework Overhead Cost Driver $ 500,000 Number of batches 279,000 Machine hours 225,000 Number of setups $1,004,000 $ 180, 300 Welding hours 210,000 Number of inspections 75,000 Rework orders $ 465,300 $ 135,000 Purchase orders 32,000 Number of units 65,000 Number of units $ 232,000 3,000 700 300 Support 450 5,000 Purchasing Providing space Providing utilities 5,800

Answer 1

1.

Overhead costs	1,701,300.00	283.55	Per Machine Hour
Machine Hours	6,000.00

2.

Overhead Assigned	Activity Driver	Plantwide OH rate	Total Overhead Cost	Units Produced	OH Cost per unit
model 145	1,800.00	283.55	510,390.00	1,500.00	340.26
Model 212	4,200.00	283.55	1,190,910.00	3,500.00	340.26

Total Manufacturing Cost per unit	model 145	Model 212
Materials and labor	250.00	180.00
Overhead	340.26	340.26
Total Manufacturing Cost	590.26	520.26

3)

	model 145	Model 212
Market Price	820.00	480.00
Manufacturing Cost per unit	-    590.26	-    520.26
Profit(loss) Per unit	229.74	-      40.26