ice cool produces two different models of air conditioners. the activities, costs, and cost drivers associated with the production processes follow. processactivitybudgeted costactivity cost driverbudgeted activity usage assemblymachining$ 279,000machine hours (mh)6,000 setups24,000setups120 $ 303,000 finishinginspecting$ 210,000inspections700 supportpurchasing$ 135,000purchase orders450 additional production information concerning its two models follows. units and activitiesmodel xmodel z units produced1,7243,463 machine hours1,8004,200 setups4080 inspections400300 purchase orders300150 per unitmodel xmodel z selling price per unit$ 420$ 400 direct materials cost per unit10090 direct labor cost per unit150160 1. compute the activity rate for each activity using activity-based costing. 2. using activity-based costing, compute the overhead cost per unit for each model. 3. compute the total product cost per unit for each model. 4. for each model, compute the gross profit per unit (selling price per unit minus product cost per unit).
