Solution-Compute the overhead cost per unit for each

Compute the overhead cost per unit for each product line

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Reference no: EM131724400

Question - 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.

Process	Activity	Overhead Cost	Driver	Quantity
Components	Changeover	$510,450	Number of batches	830
	Machining	355,424	Machine hours	7,660
	Setups	145,200	Number of setups	80
		$1,011,074
Finishing	Welding	$258,230	Welding hours	4,900
	Inspecting	342,000	Number of inspections	900
	Rework	$65,000	Rework orders	250
		$665,230
Support	Purchasing	$180,900	Purchase orders	540
	Providing space	30,700	Number of units	4,500
	Providing utilities	52,100	Number of units	4,500
		263,700

Additional production information concerning its two product lines follows.

	Model 145	Model 212
Units produced	1,500	3,000
Welding hours	1,800	3,100
Batches	415	415
Number of inspections	520	380
Machine hours	2,350	5,310
Setups	40	40
Rework orders	140	110
Purchase orders	360	180

Required - Using ABC, compute the overhead cost per unit for each product line.

Reference no: EM131724400

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Compute the overhead cost per unit for each product line

Reference no: EM131724400

Reference no: EM131724400

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