calculate gross profit per unit of each model using ABC costing

gross profit per unit

ROYALE$?

MAJESTIC $?

Schultz Electronics manufactures two ultra high-definition television models the Royale which sells for $1,580, and a new model, the Majestic, which sells for $1,320. The production cost computed per unit under traditional costing for each model in 2020 was as follows. 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 $8,045,000 by the total direct labor hours (200,000) for the two models. Under traditional costing. the gross profit on the models was Royale $560($1,580$1,020) and Majestic $620($1,320$700). Because of this difference, management is considering phasing out the Royale model and increasing the production of the Majestic model4 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. Under traditional costing, the gross profit on the models was Royale $560($1,580$1,020) and Majestic $620($1,320$700) Because of this difference, management is considering phasing out the Royale model and increasing the production of the Majes model. Before finalizing its decision, management asks Schultz's controller to prepare an analysis using activity-based costing (ABC). Th controller accumulates the following information about overhead for the year ended December 31, 2020. The cost drivers used for each product were: The cost drivers used for each product were: 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 2 decimal places, e.g. 12.25.) Calculate cost per unit of each model using ABC costing. (Round answers to.2 decimal places, e.g. 12.25.) Calculate gross profit per unit of each model using ABC costing. (Round answers to 2 decimal places, e.g. 12.25.)