Exercise 04-11 Using ABC to assess prices LO P3 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 Components Changeover Machining Setups Driver Number of batches Machine hours Number of setups Quantity 810 7,830 200 Finishing Welding Inspecting Rework Overhead Cost $ 546,750 366,444 377,000 $1,290, 194 $ 275, 850 294,800 60, 500 $ 631,150 $ 158, 455 30, 600 117,600 $ 306,655 Welding hours Number of inspections Rework orders 4,500 880 220 Support Purchasing Providing space Providing utilities Purchase orders Number of units Number of units 473 7,800 7,800 Additional production information concerning its two product lines follows. Units produced Welding hours Batches Number of inspections Machine hours Setups Rework orders Purchase orders Model 145 2,600 1,000 405 480 2,550 100 Model 212 5,200 3,500 405 400 5,280 100 70 158 315 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 $112 for Model 212. 3. If the market price for Model 145 is $585.01 and the market price for Model 212 is $348.60, determine the profit or loss per unit for each model. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using ABC, compute the overhead cost per unit for each product line. (Round your final answers to 2 decimal places.) Model 145 Activity driver Overhead incurred assigned Model 212 Activity driver Overhead incurred assigned Expected Costs Expected Activity Activity Rate $ 546,750 366,444 377,000 810 Number of batches 7,830 Machine hours 200 Setups Activity Components Changeover Machining Setups Finishing Welding Inspecting Rework Support Purchasing Providing space and utilities 275,850 294,800 60,500 4,500 Welding hours 880 Inspections 220 Rework orders $ 159 158,455 148,200 473 Purchase orders 7,800 Units Total overhead cost Total units produced Overhead cost per unit Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 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 $112 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 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 $585.01 and the market price for Model 212 is $348.60, 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