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. (Round your intermediate calculations and round "Cost per unit and OH rate" answers to 2 decimal places.)
Process Activity Overhead Cost Driver Quantity
Components Changeover $ 459,500 Number of batches 810
Machining 301,600 Machine hours 7,680
Setups 227,500 Number of setups 80
$ 988,600
Finishing Welding $ 180,500 Welding hours 4,900
Inspecting 222,000 Number of inspections 815
Rework 60,700 Rework orders 230
$ 463,200
Support Purchasing $ 135,500 Purchase orders 525
Providing space 31,550 Number of units 4,800
Providing utilities 60,110 Number of units 4,800
$ 227,160
Additional production information concerning its two product lines follows.
Model 145 Model 212
Units produced 1,600 3,200
Welding hours 2,000 2,900
Batches 405 405
Number of inspections 485 330
Machine hours 2,280 5,400
Setups 40 40
Rework orders 130 100
Purchase orders 350 175
Required:
1. Using a plantwide overhead rate based on machine hours, compute the overhead cost per unit for each product line.
2. Determine the total cost per unit for each products line if the direct labor and direct materials costs per unit are $200 for Model 145 and $130 for Model 212.
Answers: 2
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