Cullumber Electronics Company manufactures two large-screen television models: the Deluxe, which has been produced for many years and sells for $1,100, and the Flat, a new model, which sells for $1,490, Based on the following income statement for 2022, the CFO at CullumlJer has decided to concentrate the marketing resources on the Flat model and to begin to phase out the Deluxe model. CULLUMBERELECTRONICS COMPANY Income Statement Year Ended December 31, 2022 Flat Deluxe Total Sales $ 6,109,000 $ 24,200,000 $ 30,309,000 Cost of goods sold 3,313,000 15,180,000 18,993,000 Gross margin 2,296,000 9,020,000 11,316,000 Selling and administrative expenses 779,000 2,640,000 3,419,000 Net prot 5 1,517,000 $ 6,380,000 $ 7,897,000 Units produced and sold 4,100 22,000 Net prot per unit sold $370 $290 The standard unit costs for the Flat and Deluxe models are as follows: Direct materials Direct labour: Fl at Deluxe $660 $260 Flat (3.5 hrs. * $20/hr.) 70 Deluxe (1.5 hrs. * $20/hr.) 30 Machine usage: Flat (4 hrs. * $25/hr.) 100 Deluxe (8 hrs. * $25/hr.) 200 Manufacturing overhead 100 200 Standard cost $930 $690 Manufacturing overhead was applied on the basis of machine hours at a predetermined rate of $25 per hour. Cullumber's CFO is in favour of using an activity-based costing system and has gathered the following information about the company's manufacturing overhead costs for 2022: Units of the Cost Driver Activity Centres and Cost Drivers Activity Costs Flat Deluxe Total Soldering (number of solder joints) $ 906,000 310,000 1,200,000 1,510,000 Shipments (number of shipments) 836,400 4,900 15,500 20,400 Quality control (number of inspections) 1,134,000 21,000 60,000 81,000 Purchase orders (number of orders) 815,000 112,000 51,000 163,000 Machine power (machine hours) 98,000 16,400 176,000 192,400 Machine set-ups (number of set-ups) 1,020,000 4,000 6,000 10,000Total traceable costs $ 4,309,400 Using activitybased costing, calculate the gross margin for Flat model and Deluxe model. {Round per machine hour to 5 decimal places, ea. 15.21156. otherfnllermedlate calwlauns ta 2 decimal places, ea. 15.25 and nal answers to 2 decimal places, as. 15.25%.) Gross margin I 96 l 536 Using activitybased costing, determine whether Cu l lumber Electronics should continue to emphasize the Flat model and phase out the Deluxe model. B 61 B Electronics v with its plans to emphasize the Flat model and phase out the Deluxe model