hapter 4 Question 8, E4-28A (similar to) Part 1 of 6 HW Score: 42.08%, 4.21 of 10 points O Points: 0 of 1 Save Several years after reengineering its production process, Zeke Corporation hired a new controller, Christine Erickson. She developed an ABC system very similar to the one used by Zeke's chief rival. Part of the reason Erickson developed the ABC system was because Zeke's profits had been declining even though the company had shifted its product mix toward the product that had appeared most profitable under the old system. Before adopting the new ABC system, Zeke had used a plantwide overhead rate based on direct labor hours that was developed years ago (Click the icon to view the overhead costs and budgeted data.) Read the requirements Requirement 1. Compute the gross profit per wheel if managers rely on the ABC unit cost data. (Enter amounts to two decimal places.) Begin by computing the total manufacturing cost per wheel for each wheel model. Zeke Corporation Total cost per unit using ABC data Total manufacturing cost Standard Deluxe (Click the icon to view the ov Data Table ead the requirements. Data table Manufacturing Overhead Costs per Unit: de overhead rate based on direct labe - X Requirement 1. Compute the gr decimal places.) Standard Deluxe Begin by computing the total mar ABC costs.. $ 300.00 $ 486.00 Zeke Plantwide overhead rate 340.60 $ 445.40 Total cost pe The following data are budgeted for the company's Standard and Deluxe models for next year: Standard Deluxe Sales price per wheel..... $ 470.00 $ 630.00 Direct materials per wheel Direct labor per wheel........ $ $ 31.00 $ 46.00 45.20 $ 51.50 Total manufacturing cost Print Done Requirements years Requirement 1. Begin by computi Requirements 1. Compute the gross profit per wheel if managers rely on the ABC unit cost data. 2. Compute the gross profit per wheel if the managers rely on the plantwide allocation cost data. 3. Which product line is more profitable for the company? 4. Why might the controller have expected ABC to pass the cost-benefit test? Were there any warning signs that the company's old direct-labor-based allocation system was broken? Total manufactu Print Done - x