CHeck my work Real Cool produces two different models of air conditioners. The c
ID: 2401461 • Letter: C
Question
CHeck my work Real 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 actlvities, costs, and drivers associated with these two manufacturing processes and the production support process follow. Components Changeover 790 7,820 60 $493,750 Number of bateches Machining Setups 358,156Machine hours 108,300 Number of setups es $960,206 5,900 805 180 Pinishing Welding 341,610 Welding houre 301,875 Number of inspectiona Inapecting Rework 53,100Revork orders $696,585 193,800Purchase orders Purchasing Providing space Providing utilities s10 8,700 8,700 Support 31,500 Number of unita 137 280 Nunber of uníts $362,580Explanation / Answer
Expected Costs (A)
Expected Activity (B)
Activity Rate (C=A/B)
Activity
Components
Changeover
$ 493,750.00
790.00
Number of Batches
$ 625.00
Per Batch
Machining
$ 358,156.00
7820.00
Machine Hours
$ 45.80
Per Machine Hour
Setups
$ 108,300.00
60.00
Setups
$ 1,805.00
Per Setup
Finishing
Welding
$ 341,610.00
5900.00
Welding Hours
$ 57.90
Per Welding Hour
Inspecting
$ 301,875.00
805.00
Inspections
$ 375.00
Per Inspection
Rework
$ 53,100.00
180.00
Rework Hours
$ 295.00
Per Rework Hour
Support
Purchasing
$ 193,800.00
510.00
Purchase Orders
$ 380.00
Per Purchase Order
Providing Space and Utilities
$ 168,780.00
8700.00
Units
$ 19.40
Per Unit
Model 145
Activity rate(A)
Activity Driver Incurred (B)
Overhead Assigned (C=A*B)
Components
Changeover
$ 625.00
395.00
$ 246,875.00
Machining
$ 45.80
2550.00
$ 116,790.00
Setups
$ 1,805.00
30.00
$ 54,150.00
Finishing
Welding
$ 57.90
2200.00
$ 127,380.00
Inspecting
$ 375.00
475.00
$ 178,125.00
Rework
$ 295.00
90.00
$ 26,550.00
Support
Purchasing
$ 380.00
340.00
$ 129,200.00
Providing Space and Utilities
$ 19.40
2900.00
$ 56,260.00
Total Overheads
$ 935,330.00
Production
2900.00
Overhead cost per unit
$ 322.53
Model 212
Activity rate(A)
Activity Driver Incurred (B)
Overhead Assigned (C=A*B)
Changeover
$ 625.00
$ 395.00
$ 246,875.00
Machining
$ 45.80
$ 5,270.00
$ 241,366.00
Setups
$ 1,805.00
$ 30.00
$ 54,150.00
Finishing
Welding
$ 57.90
$ 3,700.00
$ 214,230.00
Inspecting
$ 375.00
$ 330.00
$ 123,750.00
Rework
$ 295.00
$ 90.00
$ 26,550.00
Support
Purchasing
$ 380.00
$ 170.00
$ 64,600.00
Providing Space and Utilities
$ 19.40
$ 5,800.00
$ 112,520.00
Total Overheads
$ 1,084,041.00
Production
5900.00
Overhead cost per unit
$ 183.74
2)
Cost per Unit
Model 145
Model 212
Material and Labout
$ 220.00
$ 122.00
Overhead Cost
$ 322.53
$ 183.74
$ 542.53
$ 305.74
3)
Profit Per Unit
Model 145
Model 212
Price per Unit
$ 935.00
$ 550.00
Less- Cost Per Unit
$ 542.53
$ 305.74
$ 392.47
$ 244.26
Expected Costs (A)
Expected Activity (B)
Activity Rate (C=A/B)
Activity
Components
Changeover
$ 493,750.00
790.00
Number of Batches
$ 625.00
Per Batch
Machining
$ 358,156.00
7820.00
Machine Hours
$ 45.80
Per Machine Hour
Setups
$ 108,300.00
60.00
Setups
$ 1,805.00
Per Setup
Finishing
Welding
$ 341,610.00
5900.00
Welding Hours
$ 57.90
Per Welding Hour
Inspecting
$ 301,875.00
805.00
Inspections
$ 375.00
Per Inspection
Rework
$ 53,100.00
180.00
Rework Hours
$ 295.00
Per Rework Hour
Support
Purchasing
$ 193,800.00
510.00
Purchase Orders
$ 380.00
Per Purchase Order
Providing Space and Utilities
$ 168,780.00
8700.00
Units
$ 19.40
Per Unit