Exercise 7.28 Wildhorse Electronics manufactures two large-screen, high-definition television (HDTV) models-the Monarch, which has been produced since 2010 and sells for $1,100, and the Regal, a model introduced in early 2012 that sells for $1,200. Wildhorse's CEO, Harry Hazelwood, suggested that the company concentrate its marketing resources on the Regal model and begin to phase out the Monarch model. Wildhorse currently uses a traditional costing system. The following cost information has been used as a basis for pricing decisions over the past year: Per-Unit Data Monarch Regal Direct materials $212 $566 Direct labour hours 1.2 3.4 Machine hours 12 6 Units produced 20,000 3,800 The direct labour cost is $12 per hour, and the machine usage cost is $18 per hour. Manufacturing overhead costs were estimated at $5,220,580 and were allocated on the basis of machine hours. Martin Alecks, the new company controller, suggested that an activity-based costing analysis first be run to get a better picture of the true manufacturing cost. The following data were collected: Activity Cost Traceable Centre Driver Costs Soldering Number of solder joints $775,000 Shipments Number of shipments 1,034,000 Quality control Number of inspections 1,323,000 Purchase orders Number of orders 1,331,680 Machining Machine hours 54,900 Machine setups Number of setups 702,000 Total traceable costs $5,220,580 Number of Events Activity Monarch Regal Total Soldering 1,235,000 315,000 1,550,000 Shipments 15,400 6,600 22,000 Quality control 56,600 16,900 73,500 Purchase orders 86,300 103,940 190,240 Machining 172,000 11,000 183,000 Machine setups 16,000 10,000 26,000 Selling, general, and administrative expenses per unit sold are $264.00 for Monarch and $240.80 for Regal. Calculate the manufacturing cost per unit for Monarch and Regal under a traditional costing system. (Round answers to 2 decimal places, e.g. 5.69.) Monarch Regal X Cost per unit LINK TO TEXT LINK TO TEXT LINK TO TEXT X Your answer is incorrect. Try again. Calculate the manufacturing cost per unit for Monarch and Regal under an ABC system. (Round answers to 2 decimal places, e.g. 5.69.) Monarch Regal Cost per unit LINK TO TEXT LINK TO TEXT LINK TO TEXT x Your answer is incorrect. Try again. Calculate the operating profit/loss per unit for Monarch and Regal under a traditional costing system. (Round answers to 2 decimal places, e.g. 6.59. Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) Monarch Regal Profit/(Loss) LINK TO TEXT LINK TO TEXT LINK TO TEXT x Your answer is incorrect. Try again. Calculate the operating profit/loss per unit for Monarch and Regal under an ABC system. (Round answers to 2 decimal places, e.g. 6.59. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Monarch Regal Profit/(Loss)
