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Way Cool produces two different models of air conditioners

Accounting

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 Overhead Cost   D Quantity Components Changeover $500,250 Number of batches 870 Machining 282,720 Machine hours 8,220 Setups 112,200 Number of setups 60 $995,170 Finishing Welding $212,760 Welding hours 5,200 Inspecting 211,400 Number of inspections 865 Rework 42,500 Rework orders 170 $667,660 Support Purchasing $182,150 Purchase orders 555 Providing space 20,200 Number of units 4,200 Providing utilities 50,440 Number of units 4,200 $262,790 
Additional production information concerning its two product lines follows. 
Model 145 Model 212 Units produced 1,400 2,800 Welding hours 2,400 2,900 Batches 435 435 Number of inspections 525 240 Machine hours 3,050 5,270 Setups 30 20 Rework orders 110 60 Purchase orders 370 185 
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 $240 for Model 14! and $122 for Model 212 3. If the market price for Model 145 is $92210 and the market price for Model 212 is $469.64. determine the profit or loss per unit fo each model. 
Complete this question by entering your answers in the tabs below. 
Required 1 Required 2 
Required 3 
If the market price for Model 145 is $922.10 and the market price for Model 212 is $469.64, determine the profit or loss per unit for each model. (Round your final answers to 2 decimal places.) 
Model 145 Model 212 Price per unit Cost per unit . . Profit (loss) per unit , . 
< Required 2 

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Allocation of overhead and computation of overhead cost per unit - ABC
Activity Expected cost Activity Base Expected Activity Activity Rate Model 145 Model 212
Activity Driver incurred Overhead assigned Activity Driver incurred Overhead assigned
Component:                
Changeover $500,250.00   Nos of batches 870 $575.00  435 $250,125.00   435 $250,125.00  
Machining $382,720.00   Machine hours 8320 $46.00  3050 $140,300.00   5270 $242,420.00  
Setup 112200 Nos of setups 60 $1,870.00   30 $56,100.00   30 $56,100.00  
Finishing:                
Welding 313760 Welding hours 5300 $59.20  2400 $142,080.00   2900 $171,680.00  
Inspecting 311400 Nos of inspections 865 $360.00  525 $189,000.00   340 $122,400.00  
Rework 42500 Rework orders 170 $250.00  110 $27,500.00   60 $15,000.00  
Support:                
Purchasing 183150 Purchase orders 555 $330.00  370 $122,100.00   185 $61,050.00  
Providing space and utilities 80640 Nos of units 4200 $19.20  1400 $26,880.00   2800 $53,760.00  
                 
Total $1,926,620.00           $954,085.00     $972,535.00  
Nos of units           1400   2800
Overhead cost per unit           $681.49    $347.33 

 

Computation of Per unit Cost
Particulars Model 145 Model 212
Direct material and labor $240.00  $122.00 
Overhead cost per unit $681.49  $347.33 
     
Cost per unit $921.49  $469.33 

 

Computation of Profit (Loss) per unit
Particulars Model 145 Model 212
Selling price per unit $922.10  $469.64 
Cost per unit $921.49  $469.33 
     
Profit (Loss) per unit $0.61  $0.31 

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