Crane Electronics manufactures two ultra-high-definition television models: the Royale, which sells for $1,480, and a new model, the Majestic, which sells for $1,270. The production cost computed per unit under traditional costing for each model in 2022 was as follows. Traditional Costing Royale Majestic Direct materials $600 $390 Direct labor ($20 per hour) 120 100 Manufacturing overhead ($37.540 per DLH) 225 188 Total per unit cost $945 $678 In 2022, Crane manufactured 25,000 units of the Royale and 10,000 units of the Majestic. The overhead rate of $37.540 per direct labor hour was determined by dividing total estimated manufacturing overhead of $7,508,000 by the total direct labor hours (200,000) for the two models. Under traditional costing, the gross profit on the models was Royale $535 ($1,480-$945) and Majestic $592 ($1,270 - $678). Because of this difference, management is considering phasing out the Royale model and increasing the production of the Majestic model Before finalizing its decision, management asks Crane'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. Activity-Based Overhead Rate Activity Cost Pools Purchasing Cost Drivers Number of orders Estimated Overhead Estimated Use of Cost Drivers $1,178,000 38,000 $31/order Machine setups Number of setups 816,000 16,000 $51/setup 1.000.000 410.000