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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. Process Activity Components Changeover Machining Setups Finishing Welding Support Inspecting Rework Purchasing Providing space Providing utilities Overhead Cost $ 559,650 411,510 74,000 $1,045, 160 Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders $ 288,640 257,600 55,000 $ 601,248 $ 194,540 30,800 37,968 $ 263,300 Model 145 1,200 1,200 455 475 Driver Number of batches Machine hours Number of setups Additional production Information concerning its two product lines follows. 3,350 28 158 365 Welding hours Number of inspections Rework orders Purchase orders Number of units Number of units Model 212 2,400 3,200 455 330 5,350 20 100 183 Quantity 910 8,780 40 4,400 885 250 548 3,600 3,600 Required: 1. Using ABC, compute the overhead cost per unit for each product line. 2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $250 for Model 145 and $112 for Model 212. 3. If the market price for Model 145 is $993.57 and the market price for Model 212 is $536.62, determine the profit or loss per unit for each model.

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. Process Activity Components Changeover Machining Setups Finishing Welding Support Inspecting Rework Purchasing Providing space Providing utilities Overhead Cost $ 559,650 411,510 74,000 $1,045, 160 Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders $ 288,640 257,600 55,000 $ 601,248 $ 194,540 30,800 37,968 $ 263,300 Model 145 1,200 1,200 455 475 Driver Number of batches Machine hours Number of setups Additional production Information concerning its two product lines follows. 3,350 28 158 365 Welding hours Number of inspections Rework orders Purchase orders Number of units Number of units Model 212 2,400 3,200 455 330 5,350 20 100 183 Quantity 910 8,780 40 4,400 885 250 548 3,600 3,600 Required: 1. Using ABC, compute the overhead cost per unit for each product line. 2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $250 for Model 145 and $112 for Model 212. 3. If the market price for Model 145 is $993.57 and the market price for Model 212 is $536.62, determine the profit or loss per unit for each model.

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 36P: Reducir, Inc., produces two different types of hydraulic cylinders. Reducir produces a major...
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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. Process Activity Components Changeover Machining Setups Finishing Welding Support Inspecting Rework Purchasing Providing space Providing utilities Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders Required 1 Overhead Cost $ 559,650 411,510 74,000 $1,045,160 $ 288,640 257,600 55,000 601,240 $ $ 194,540 30,800 37,960 $ 263,300 Additional production Information concerning its two product lines follows. Required 2 Model 145 1,200 1,200 455 475 3,350 20 150 365 Driver Number of batches Machine hours Number of setups Required 3 Welding hours Number of inspections Rework orders Purchase orders Number of units Number of units Model 212 2,400 3,200 455 330 5,350 20 100 183 Complete this question by entering your answers in the tabs below. Required: 1. Using ABC, compute the overhead cost per unit for each product line. 2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $250 for Model 145 and $112 for Model 212. Quantity 910 8,700 40 3. If the market price for Model 145 Is $993.57 and the market price for Model 212 is $536.62, determine the profit or loss per unit for each model. 4,400 805 250 548 3,600 3,600 Using ABC, compute the overhead cost per unit for each product line. (Round your final answers to 2 decimal places.)
Transcribed Image Text: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. Process Activity Components Changeover Machining Setups Finishing Welding Support Inspecting Rework Purchasing Providing space Providing utilities Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders Required 1 Overhead Cost $ 559,650 411,510 74,000 $1,045,160 $ 288,640 257,600 55,000 601,240 $ $ 194,540 30,800 37,960 $ 263,300 Additional production Information concerning its two product lines follows. Required 2 Model 145 1,200 1,200 455 475 3,350 20 150 365 Driver Number of batches Machine hours Number of setups Required 3 Welding hours Number of inspections Rework orders Purchase orders Number of units Number of units Model 212 2,400 3,200 455 330 5,350 20 100 183 Complete this question by entering your answers in the tabs below. Required: 1. Using ABC, compute the overhead cost per unit for each product line. 2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $250 for Model 145 and $112 for Model 212. Quantity 910 8,700 40 3. If the market price for Model 145 Is $993.57 and the market price for Model 212 is $536.62, determine the profit or loss per unit for each model. 4,400 805 250 548 3,600 3,600 Using ABC, compute the overhead cost per unit for each product line. (Round your final answers to 2 decimal places.)
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