Choice Hotels produces three models of guest rooms: the standard guest room, Junior Suite, and Presidential Suite. The Standard Guest Room comes with basic furniture, bathroom plan, and amenities. It sells for $140,000 to franchise hotels. The Junior Suite model is larger and inculdes an enhanced furniture selection, upgraded bathroom fixtures, more comfortable bedding. The guest room is considered an upgrade from the standard guestroom model. The Junior Suite sells for $240,000 to franchise hotels. The Presidential Suite model is a custom-made guest room with floors and walls constructed from specialty wood. The drapes are made from the traditional flax-based canvass. It has the look and feel of a room in the White House, with modern comforts and security. The Presidential Suite sells for $1,050,000 to franchise hotels. Workers who build the Presidential Suite are specialized craftsmen. They earn twice the hourly rate of those working on the Standard Guest Room and Junior Suite models. The labor rate is fully burdened to include benefits. Most of Choice Hotels guest room sales come from the Standard Guest Room and the Junior Suite, but sales of the Presidential Suite model have been growing. The company's sales, production, and cost information for last year is provided to the right: Choice Hotels Sales, Production, and Cost Information Room Type Standard Guest Room Junior Suite Presidential Suite Volume 150 110 25 Price $140,000 $240,000 $1,050,000 Unit costs Direct materials $30,000 $92,000 $310,000 Direct labor $54,000 $85,000 $640,000 Manufacturing $30,000 $30,000 $30,000 overhead Total unit cost $114,000 $207,000 $980,000 Unit gross profit $26,000 $33,000 $70,000 Direct labor hours 1,200 1,300 5,940 Rate per hour $45.00 $65.38 $107.74 Manufacturing overhead Amount Cost driver Standard Guest Room Junior Suite Presidential Suite Depreciation $3,200,000 Square feet 50,000 30,000 30,000 Maintenance $1,800,000 Direct labor hours 180,000 143,000 148,500 Purchasing $320,000 # of purchase orders 2,500 1,500 9,000 Inspection $850,000 # of inspections 1,000 850 3,500 Indirect $490,000 Units manufactured 150 110 25 materials Supervision $1,700,000 # of inspections 1,000 850 3500 Supplies $190,000 Units manufactured 150 110 25 Total $8,550,000 Type Cost Depreciation $3,200,000 Maintenance $1,800,000 Purchasing $320,000 Inspection $850,000 Indirect materials $490,000 Supervision $1,700,000 Supplies $190,000 Total manufacturing overhead cost $8,550,000 1. Use activity-based costing to allocate the costs of overhead per unit and in total to each guest room type. Show all supporting calculations in the space provided. 1A. Calculate the cost of one Presidential Suite using activity-based costing 1B. What price should Choice Hotels charges for the Presidential Suite using the activity cost-based method 1C. Assume that the Presidential Suite has the same profit margin as the Standard Guest Room using activity cost method. What should its selling price be? Show all calculations 1D.At a selling price of $1,050,000 each, what is the breakeven unit volume for the Presidential Suite?