27 +37200/external_tools/101121 D RN 30050, ACCT 222 ACCT Sp20 CRN 30050 P17.2A (LO 2), AP writing Schultz Electronics manufactures two ultra high-definition television models the Royale which sells for $1,600, and a new model, the Majestic, which sells for $1,300. The production cost computed per unit under traditional costing for each model in 2022 was as follows Assign overhead to products using ABC and evaluate decision. Excel Traditional Costing Royale Majestic Direct materials $ 700 $420 Direct labor ($20 per hour) 100 Manufacturing overhead ($38 per DLH) 228 190 Total per unit cost $1,048 $710 In 2022, Schultz manufactured 25.000 units of the Royale and 10,000 units of the Majestic. The overhead rate of $38 per direct labor hour was determined by dividing total estimated manufacturing overhead of $7,600,000 by the total direct labor hours (200,000) for the two models. Under traditional costing, the gross profit on the models was Royale $552 ($1,600 - $1,048) and Majestie $590 ($1300 - $710). Because of this difference, management is considering phasing out the Royale model and increasing the production of the Majestie model. Before finalizing its decision, management asks Schultz's controller to prepare an analysis using activity-based costing (ABC). The controller accumulates the following information about overhead for the year ended December 31, 2022. Estimated Activity-Based Activity Estimated Use of Overhead Cost Pools Cost Drivers Overhead Cost Drivers Purchasing Number of orders $1,200,000 40,000 $3o/order Machine setups Number of setups 900,000 18,000 $50/setup Machining Machine hours 4,800,000 120,000 $40/hour Quality control Number of inspections 700,000 28,000 $25/inspection The cost drivers used for each product were: Cost Drivers Royale Majestic Total GO O D 203/2000 DELL di SDPOLEEEELLL 27 5/37280/external tools/181121 CRN 30050 > ACCT 222 ACCT Sp20 CRN 30050 Machining Machine hours 4,800,000 120,000 $40/hour Quality control Number of inspections 700,000 28,000 $25/inspection The cost drivers used for each product were: Cost Drivers Royale Majestic Total Purchase orders 17,000 23,000 40,000 Machine setups 5,000 13,000 18,000 Machine hours 75,000 45.000 120,000 Inspections 11,000 17,000 28,000 Instructions a. Assign the total 2022 manufacturing overhead costs to the two products using activity-based costing (ABC) and determine the overhead cost per unit. a. Royale $4,035,000 b. What was the cost per unit and gross profit of each model using ABC? b. Cost/unit-Royale $981.40 c. Are management's future plans for the two models sound? Explain. P17.3A (LO 1.2), AN Wil Shaker Stairs Co. designs and builds factory-made premium wooden stairways for homes. The manufactured stairway components (spindles, risers, hangers, hand rails) permit installation of stairways of varying lengths and width All are of white oak wood. Budgeted manufacturing overhead costs for the year 2022 are as follows. Assign overhead costs using traditional costing and ABC, compare results. Overhead Cost Pools Amount $ 25.000 Purchasing GOOD DELL 27 +37200/external_tools/101121 D RN 30050, ACCT 222 ACCT Sp20 CRN 30050 P17.2A (LO 2), AP writing Schultz Electronics manufactures two ultra high-definition television models the Royale which sells for $1,600, and a new model, the Majestic, which sells for $1,300. The production cost computed per unit under traditional costing for each model in 2022 was as follows Assign overhead to products using ABC and evaluate decision. Excel Traditional Costing Royale Majestic Direct materials $ 700 $420 Direct labor ($20 per hour) 100 Manufacturing overhead ($38 per DLH) 228 190 Total per unit cost $1,048 $710 In 2022, Schultz manufactured 25.000 units of the Royale and 10,000 units of the Majestic. The overhead rate of $38 per direct labor hour was determined by dividing total estimated manufacturing overhead of $7,600,000 by the total direct labor hours (200,000) for the two models. Under traditional costing, the gross profit on the models was Royale $552 ($1,600 - $1,048) and Majestie $590 ($1300 - $710). Because of this difference, management is considering phasing out the Royale model and increasing the production of the Majestie model. Before finalizing its decision, management asks Schultz's controller to prepare an analysis using activity-based costing (ABC). The controller accumulates the following information about overhead for the year ended December 31, 2022. Estimated Activity-Based Activity Estimated Use of Overhead Cost Pools Cost Drivers Overhead Cost Drivers Purchasing Number of orders $1,200,000 40,000 $3o/order Machine setups Number of setups 900,000 18,000 $50/setup Machining Machine hours 4,800,000 120,000 $40/hour Quality control Number of inspections 700,000 28,000 $25/inspection The cost drivers used for each product were: Cost Drivers Royale Majestic Total GO O D 203/2000 DELL di SDPOLEEEELLL 27 5/37280/external tools/181121 CRN 30050 > ACCT 222 ACCT Sp20 CRN 30050 Machining Machine hours 4,800,000 120,000 $40/hour Quality control Number of inspections 700,000 28,000 $25/inspection The cost drivers used for each product were: Cost Drivers Royale Majestic Total Purchase orders 17,000 23,000 40,000 Machine setups 5,000 13,000 18,000 Machine hours 75,000 45.000 120,000 Inspections 11,000 17,000 28,000 Instructions a. Assign the total 2022 manufacturing overhead costs to the two products using activity-based costing (ABC) and determine the overhead cost per unit. a. Royale $4,035,000 b. What was the cost per unit and gross profit of each model using ABC? b. Cost/unit-Royale $981.40 c. Are management's future plans for the two models sound? Explain. P17.3A (LO 1.2), AN Wil Shaker Stairs Co. designs and builds factory-made premium wooden stairways for homes. The manufactured stairway components (spindles, risers, hangers, hand rails) permit installation of stairways of varying lengths and width All are of white oak wood. Budgeted manufacturing overhead costs for the year 2022 are as follows. Assign overhead costs using traditional costing and ABC, compare results. Overhead Cost Pools Amount $ 25.000 Purchasing GOOD DELL