Question

4.4 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 Driver Quantity Components Changeover $ 505,750 Number of batches 850 Machining 371,265 Machine hours 7,950 Setups 418,000 Number of setups 220 $ 1,295,015 Finishing Welding $ 306,500 Welding hours 5,000 Inspecting 280,500 Number of inspections 825 Rework 37,400 Rework orders 170 $ 624,400 Support Purchasing $ 156,090 Purchase orders 473 Providing space 30,400 Number of units 4,500 Providing utilities 56,000 Number of units 4,500 $ 242,490 Additional production information concerning its two product lines follows. Model 145 Model 212 Units produced 1,500 3,000 Welding hours 1,000 4,000 Batches 425 425 Number of inspections 475 350 Machine hours 2,650 5,300 Setups 110 110 Rework orders 90 80 Purchase orders 315 158 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 $200 for Model 145 and $117 for Model 212. 3. If the market price for Model 145 is $841.35 and the market price for Model 212 is $517.63, determine the profit or loss per unit for each model.

Using ABC, compute the overhead cost per unit for each product line. (Round your final answers to 2 decimal places.)

Model 145 Model 212 Activity Expected Costs Expected Activity Activity Rate Activity driver incurred Overhead assigned Activity driver incurred Overhead assigned Components Changeover $505,750 850 Number of batches Machining 371,265 7,950 Machine hours Setups 418,000 220 Setups Finishing Welding $306,500 5,000 Welding hours Inspecting 280,500 825 Inspections Rework 37,400 170 Rework orders Support Purchasing $156,090 473 Purchase orders Providing space and utilities 86,400 4,500 Units Total overhead cost $0 $0 Total units produced Overhead cost per unit

• Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $200 for Model 145 and $117 for Model 212. (Round your final answers to 2 decimal places.)

  	Model 145 Model 212 Materials and Labor per unit Overhead cost per unit Total cost per unit

  If the market price for Model 145 is $841.35 and the market price for Model 212 is $517.63, 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

• Consider the following data for two products of Gitano Manufacturing. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations and "OH rate and cost per unit" answers to 2 decimal places.)
  

  	Product A	Product B
  Number of units produced	11,000 units	1,700 units
  Direct labor cost (@ $24 per DLH)	0.15 DLH per unit	0.26 DLH per unit
  Direct materials cost	$ 2.00 per unit	$ 3.10 per unit

    

  Activity	Overhead costs
  Machine setup		$	29,260
  Materials handling			56,000
  Quality control inspections			103,020
  		$	188,280

    
  Required:
  

Answer 1

Statement of Cost Pools					ACTIVITY INCURRED	Overhead Assigned
Cost Drivers/ Activity	Total Costs	Allocation Base	Level of Allocation Base	Activity Rates	MODEL 145	MODEL 212	MODEL 145	MODEL 212
Components Changeover	5,05,750	Number of batches	850	595	425	425	2,52,875	2,52,875
Machining	3,71,265	Number Of Machine hours	7,950	46.7	2,650	5,300	1,23,755	2,47,510
Setups	4,18,000	Number Of Setups	220	1900	110	110	2,09,000	2,09,000
Finishing Welding	3,06,500	Number Of Welding Hours	5,000	61.3	1,000	4,000	61,300	2,45,200
Inspecting	2,80,500	Number Of Inspections	825	340	475	350	1,61,500	1,19,000
Rework	37,400	Number Of Rework Orders	170	220	90	80	19,800	17,600
Support Purchasing	1,56,090	Number Of Purchase Orders	473	330	315	158	1,03,950	52,140
Providing space and utilities	86,400	Number Of Units	4,500	19.2	1,500	3,000	28,800	57,600
TOTAL OVERHEADS COST	9,60,980	12,00,925
Statement of Overhead Cost per Unit
Particulars	MODEL 145	MODEL 212
Total overhead cost	9,60,980	12,00,925
Total units produced	1,500	3,000
Overhead Cost per unit	640.65	400.31
Statement of Costs
Particulars	MODEL 145	MODEL 212
Materials And Labor Per Unit	200.00	117.00
Overhead Cost per unit	640.65	400.31
Overhead cost per unit	840.65	517.31
Statement of Profit/ (Loss)
Particulars	MODEL 145	MODEL 212
Market Price Per Unit	841.35	517.63
Total units produced	840.65	517.31
Profit/(Loss) Per Unit	0.70	0.32

Note: Above Query is composed of 2 different queries. Gitano Manufacturing Details are incomplete. Hence, the other complete Question given above has been solved.