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.

Plantwide Overhead Rate $ 213.61 per hour

1) Overhead Cost Model 145=$ 487062.56

1) Overhead Cost Model 211= $ 1153494

Total Cost per unit       Model 145             696.29        Model 212                        $406.56

Explanation:

Plantwide Overhead Rate = Total Estimated Overhead/ No of Machine Hours

        Process Activity Overhead                Cost Driver Quantity

Components Changeover $ 459,500        Number of batches 810

$ 459,500/810= $567.28 per batch

Machining 301,600                                       Machine hours 7,680

301,600/ 7,680 = $ 39.27

Setups 227,500                                              Number of setups 80

227,500   /80=2843.75 per set up                                                    

$ 459,500 +301,600  +227,500  =$ 988,600                                    

Finishing Welding $ 180,500                         Welding hours 4,900

$ 180,500/  4,900= $ 36.84 per welding hour

Inspecting 222,000                                    Number of inspections 815

222,000/815 = $ 272.39 per number of inspections

Rework 60,700                                            Rework orders 230

60,700 /230 = 263.91 per rework order                                                

$ 180,500+ 222,000+  60,700 =$ 463,200                                          

Support Purchasing $ 135,500                  Purchase orders 525

$ 135,500 / 525 = $ 258.10 per purchase order

Providing space 31,550                              Number of units 4,800

31,550/4800=   $ 6.57 per number of unit

Providing utilities 60,110                             Number of units 4,800

60,110  / 4800= $ 12.53                                                                            

$ 135,500+ 31,550+60,110  =$ 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

1)Plantwide Overhead Rate = Total Estimated Overhead/ No of Machine Hours

Adding the Estimated Sub Totals we get

Total Estimated Overhead=$ 988,600  + $ 463,200  + $ 227,160

Total Estimated Overhead= $ 1678960

No of Machine Hours= 7860 (given)

Plantwide Overhead Rate =$ 1678960/7860= 213.608= $ 213.61 per hour

Overhead Cost Model 145=$ 213.61 per hour* 2,280  hours

1) Overhead Cost Model 145=$ 487062.56

1) Overhead Cost Model 211=$ 213.61 per hour* 5400 hours= $ 1153494

2)                          Model 145                               Model 212.

Direct Materials                                                     $ 130

Direct Labor             $200

Overhead Costs       $567.28* 405                        $567.28*405

                                     =   229784.4                            =    229784.4

                                  $ 39.27*2280                      $ 39.27*5400

                                      = 89535.6                             =212058

                                    2843.75*40                        2843.75* 40

                                      =113750                              =113750

Subtotal                       433070                                 555592.4

                                  $ 36.84*2000                        $ 36.84 *2900

                                  =73680 i                                     = 106836

                                  $ 272.39* 485                         $ 272.39* 330

                                     =132109.5 ii                              =  89888.7

                                    263.91*130                            263.91 *100

                                      =34308.3 iii                             =26391

Subtotal                 i+ii+iii= 240097.8                               223115.7

                                    $ 258.10*350                     $ 258.10*175

                                       =90335 i                                = 45167.5  a

                                      $ 6.57 *1600                     $ 6.57 *3200

                                       = 10512 ii                                 =21024  b

                                      $ 12.53 *1600                       $ 12.53 *3200

                                        =20048 iii                              40096  c

Subtotal                 i+ii+iii= 120895                               a+b+c = 106287.5

Total Overhead             794062.8                                      884995.6    

No of Units                   1600                                                3200        

Total Overhead Cost Per Unit   496.29                           276.56

Direct Labor                        $200                            

Direct Materials                                                           $130

Total Cost per unit                 696.29                               $406.56

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