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.) Process Activity Components Changeover Machining Setups Quantity 730 7,530 80 Finishing Welding Inspecting Rework Overhead Cost Driver $ 457,500 Number of batches 301,400 Machine hours 227,500 Number of setups $ 986,400 $ 180,200 Welding hours 221,000 Number of inspections 61,600 Rework orders $ 462,800 $ 136,500 Purchase orders 32,100 Number of units 60,630 Number of units $ 229, 230 5,500 825 240 Support Purchasing Providing space Providing utilities 495 6,000 6,000 Additional production information concerning its two product lines follows. Model 145 2,000 2,200 Model 212 4,000 3,300 365 330 5,250 لیا Ն Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders տ 2,280 օ 40 օ قا لما 165 m օ

Answer 1

Formula to calculate plantwide overhead rate
Plantwide overhead rate	Estimated manufacturing overhead costs/Estimated machine hours
Overhead cost (986,400+462,800+229,230)	$1,678,430	$222.90	per machine hour
Machine hours	7530
2
Overhead assigned	Activity driver	Plantwide OH rate	Total overhead cost	Units produced	OH Cost per unit
Model 145	2280	$222.90	$508,209.88	2000	$254.10
Model 212	5250	$222.90	$1,170,220.12	4000	$292.56
			$1,678,430.00
Calculation of total costs per unit
	Model 145	Model 212
Direct material and labor costs	$270.00	$190.00
OH cost per unit	$254.10	$292.56
Total costs per unit	$524.10	$482.56
3.
Calculation of profit or loss per unit
	Model 145	Model 212
Market price	$743.00	$480.00
Total costs per unit	$524.10	$482.56
Profit (loss)	$218.90	-$2.56