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Exercise 4-7 Using the plantwide overhead rate to assess prices LO P1

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. (Loss amounts should be indicated with a minus sign. 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		$	452,000		Number of batches	830
	Machining			301,000		Machine hours	7,530
	Setups			226,500		Number of setups	160
			$	979,500
Finishing	Welding		$	182,400		Welding hours	5,500
	Inspecting			226,000		Number of inspections	785
	Rework			61,750		Rework orders	250
			$	470,150
Support	Purchasing		$	138,000		Purchase orders	533
	Providing space			30,550		Number of units	4,800
	Providing utilities			60,130		Number of units	4,800
			$	228,680

Additional production information concerning its two product lines follows.

	Model 145			Model 212
Units produced		1,600			3,200
Welding hours		2,200			3,300
Batches		415			415
Number of inspections		520			265
Machine hours		2,280			5,250
Setups		80			80
Rework orders		140			110
Purchase orders		355			178

Required:

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