Company name has changed, but problems are set up the same way.

Emery Company manufactures wheel rims. The company produces two wheel rim models: standard and deluxe. For 2019, Emery's managers have decided to use the same indirect manufacturing costs per wheel rim that they computed in 2018 using activity-based costing. (Click the icon to view the 2018 indirect manufacturing costs per wheel rim.) In addition the unit indirect manufacturing costs, the following data are expected for the company's standard and deluxe models for 2019: (Click the icon to view the expected information.) Because of limited machine hour capacity, Emery can produce either 2,000 standard rims or 2,000 deluxe rims. Read the requirements. Requirement 1. If Eaton's managers rely on the ABC unit cost data computed in 2018, which model will they produce? Carry each cost to the nearest cent. (Ignore selling and administrative expenses for this calculation.) Use the ABC unit cost data to compute the gross profit per unit for each model. ABC Data Gross Profits Standard Deluxe Sales price Direct materials Direct labor Indirect manufacturing costs Gross profit per unit Eaton's managers will produce I units of the model to maximize income. Requirement 2. If the managers rely on the single plantwide overhead allocation rate cost data, which model will they produce? Use the single plantwide allocation rate cost data to compute the gross profit per unit for each model. (Round amounts to the nearest cent, $X.XX.) Single Allocation-Base Data Gross Profits Standard Deluxe Sales price Direct materials Direct labor Indirect manufacturing costs Gross profit per unit If they rely on the single plantwide allocation rate cost data, Eaton's managers will produce the model. It will appear to maximize income. Requirement 3. Which course of action will yield more income for Eaton? Eaton will earn more income by producing the model. data are generally more accurate than data. - I Data Table Data Table Indirect Manufacturing Cost Per Unit Standard Deluxe Standard Deluxe Sales price 500.00 $ 640.00 ABC costs $ 337.60 $ 437.60 Direct materials 34.00 50.00 Single-rate costs $ 310.08 $ 465.12 Direct labor 47.00 54.00 Print Done Print Done