Continuation of E5-26: Determine product profitability (Learning Objective 2)

Refer to your answers in E5-26. In addition to the manufacturing overhead costs, the following data are budgeted for the company’s standard and deluxe models for 2008:

Requirements 1. Compute the gross profit per wheel if managers rely on the ABC unit cost data computed in E5-26.
2. Compute the gross profit per wheel if the managers rely on the plantwide allocation cost data.
3. Which product line is more profitable for Enke?

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Standard Deluxe Sales price per wheel. $300.00 $440.00 Direct materials per wheel........ 30.00 46.00 Direct labor per wheel............. 45.00 50.00