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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 Overhead Cost Driver Quantity Components Changeover $ 465,850 Number of batches 770 Machining 374,104 Machine hours 8,080 Setups 220,800 Number of setups 120 $ 1,060,754 Finishing Welding $ 354,560 Welding hours 6,400 Inspecting 312,075 Number of inspections 855 Rework 56,100 Rework orders 220 $ 722,735 Support Purchasing $ 213,675 Purchase orders 555 Providing space 30,500 Number of units 3,900 Providing utilities 41,650 Number of units 3,900 $ 285,825 Additional production information concerning its two product lines follows. Model 145 Model 212 Units produced 1,300 2,600 Welding hours 2,200 4,200 Batches 385 385 Number of inspections 485 370 Machine hours 2,750 5,330 Setups 60 60 Rework orders 110 110 Purchase orders 370 185

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 $210 for Model 145 and $113 for Model 212. 3. If the market price for Model 145 is $952.12 and the market price for Model 212 is $538.40, determine the profit or loss per unit for each model.

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