1. Determine departmental overhead rates and compute the overhead cost per unit for each product line. Base your overhead assignment for the components department on machine hours. Use welding hours to assign overhead costs to the finishing department. Assign costs to the support department based on number of purchase orders.2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $310 for Model 145 and $180 for Model 212.3. If the market price for Model 145 is $1,400 and the market price for Model 212 is $320, determine the profit or loss per unit for each model. Exercise 17-9 Using departmental overhead rates to assess prices LO P2Way Cool produces two different models of alr conditioners. The company produces the mechanical systems In itscomponents department. The mechanical systems are combined with the housing assembly In Its finishingdepartment. The activities, costs, and drivers associated with these two manufacturing processes and theproduction support process follow.ActivityComponents ChangeoverMachiningsetupsProcessOverhead CostDriverQuantity$ 468,000Number of batches870Machine hours305,000231,0008,560Number of setups$1,004, 000Finishingweldingwelding hoursNumber of inspectionsRework orders24186,000234,0005,100InspectingRework89561,00021024481,000PurchasingProviding spaceProviding utilities$ 139,00035,00061,000$ 235,000SupportPurchase orders465Number of units4,7504,758Number of unitsAdditional production Information concerning Its two product lines follows.Model 145Model 212Units producedwelding hoursBatches1,7001,6003,8503,500435435Number of inspectionsMachine hours5053903,2505,310SetupsRework orders404014070Purchase orders310155Requlred:1. Determine departmental overhead rates and compute the overhead cost per unit for each product line. Base youroverhead assignment for the components department on machine hours. Use welding hours to assign overheadcosts to the finishing department. Assign costs to the support department based on number of purchase orders.2. Determine the total cost per unit for each product line if the direct labor and direct materlals costs per unit are$310 for Model 145 and $180 for Model 212.3. If the market price for Model 145 Is $1,400 and the market price for Model 212 Is $320, determine the profit or lossper unit for each model.

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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1. Determine departmental overhead rates and compute the overhead cost per unit for each product line. Base your overhead assignment for the components department on machine hours. Use welding hours to assign overhead costs to the finishing department. Assign costs to the support department based on number of purchase orders.
2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $310 for Model 145 and $180 for Model 212.
3. If the market price for Model 145 is $1,400 and the market price for Model 212 is $320, determine the profit or loss per unit for each model.

Exercise 17-9 Using departmental overhead rates to assess prices LO P2
Way Cool produces two different models of alr 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.
Activity
Components Changeover
Machining
setups
Process
Overhead Cost
Driver
Quantity
$ 468,000
Number of batches
870
Machine hours
305,000
231,000
8,560
Number of setups
$1,004, 000
Finishing
welding
welding hours
Number of inspections
Rework orders
24
186,000
234,000
5,100
Inspecting
Rework
895
61,000
210
24
481,000
Purchasing
Providing space
Providing utilities
$ 139,000
35,000
61,000
$ 235,000
Support
Purchase orders
465
Number of units
4,750
4,758
Number of units
Additional production Information concerning Its two product lines follows.
Model 145
Model 212
Units produced
welding hours
Batches
1,700
1,600
3,850
3,500
435
435
Number of inspections
Machine hours
505
390
3,250
5,310
Setups
Rework orders
40
40
140
70
Purchase orders
310
155
Requlred:
1. Determine departmental overhead rates and compute the overhead cost per unit for each product line. Base your
overhead assignment for the components department on machine hours. Use welding hours to assign overhead
costs to the finishing department. Assign costs to the support department based on number of purchase orders.
2. Determine the total cost per unit for each product line if the direct labor and direct materlals costs per unit are
$310 for Model 145 and $180 for Model 212.
3. If the market price for Model 145 Is $1,400 and the market price for Model 212 Is $320, determine the profit or loss
per unit for each model.

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