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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
263,700
Additional production information concerning its two product lines follows.
Model 145
Model 212
Units produced
1,500
3,000
1,800
3,100
Batches
415
520
380
2,350
5,310
40
140
110
360
180
Required - Using ABC, compute the overhead cost per unit for each product line.
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