Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Acconcing, Help System Announcements CALCULATOR PRINTER VERSION 4 NEXT Problem 17-02A a, b1-b2 Schult: Electronics manufactures two ultra high-definition television models: the Royale which sells

image text in transcribed
image text in transcribed
Acconcing, Help System Announcements CALCULATOR PRINTER VERSION 4 NEXT Problem 17-02A a, b1-b2 Schult: Electronics manufactures two ultra high-definition television models: the Royale which sells for $1,580, and a new model, the Majestic, which sells for $1,270. The production cost computed per unit under traditional costing for each model in 2020 was as follows. Traditional Costing Royale Majestic Direct materials $640 $430 Direct labor ($20 per hour) 120 100 Manufacturing overhead ($40 per DLH) 240 200 Total per unit cost $1,000 $730 In 2020, Schultz manufactured 25,000 units of the Royale and 10,000 units of the Majestic. The overhead rate of $40 per direct labor hour was determined by dividing total estimated manufacturing overhead of 37,949,600 by the total direct labor hours (200,000) for the two models under traditional costing, the gross profit on the models was Royale SS80 ($1,580 - $1,000) and Majestic 5540 (51,270 - $730). Because of this difference, management is Royale of 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, 2020, Activity Estimated Estimated Use of Activity-Based Cost Pools Cost Drivers Overhead Cost Drivers Overhead Rate Purchasing Number of orders $1,334,400 $32/order Machine setups Number of setups 894,400 17,200 $52/setup Machining Machine hours 4,961,000 121,000 $41/hour Quality control Number of inspections 759,800 26,200 529/inspection 41,700 The cost drivers used for each product were! Cost Drivers Purchase orders Machine setups Royale 18,000 5,000 Majestic 23,700 12,200 Total 41.700 17,200 Show All MacBook Air 22 CALCULATOA PRINTER VERSION 4 BACK NEKT Royale 18,000 Cost Drivers Purchase orders Machine setups Machine hours Inspections 5,000 76,000 10,000 Majestic 23,700 12,200 45,000 16,200 Total 41,700 17,200 121,000 26,200 Assign the total 2020 manufacturing overhead costs to the two products using activity-based costing (ABC) and determine the overhead cost per unit. (Round cost per unit to Royale Majestic Total assigned costs Cost per unit Calculate cost per unit of each model using ABC costing. (Round answers to 2 decimal places, e.g. 12.25.) Royale Majestic Cost per unit Calculate gross profit of each model using ABC costing (Round answers to 2 decimal places, e.g. 12.25.) Royale Majestic Gross profit ra || ung tau 4 wa | ve vu tham tu tu vi 4 in 1 Par Chart Show All MacBook Air

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions