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Schultz Electronics manufactures two ultra high-defnition television models: the Royale which sells for $1,530, and a new model, the Majestic, which sells for $1,270. The production cost computed per unit under traditional costing for each model in 2020 was as follows. Traditional Costing Royale Majestic Direct materials Direct labor ($20 per hour) Manufacturing overhead ($ 41 per DLH) Total per unit cost $610 120 246 $ 976 $400 100 205 $705 In 2020, Schultz manufactured 25,000 units of the Royale and 10,000 units of the Majestic. The overhead rate of $41 per direct labor hour was determined by dividing total estimated manufacturing overhead of $8,187,500 by the total direct labor hours (200,000) for the two models. Under traditional costing, the gross profit on the models was Royale $554 ($ 1,530 -$976) and Majestic $565 ($1,270- $705). 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 Schultz's controller to prepare an analysis using activity-based costing (ABC). The controller accumulates the following information about overhead for the year ended December 31,2020 Activity Cost Pools Cost Drivers Estimated Overhead Estimated Use of Cost Drivers Purchasing Machine setups Machining Quality control Number of orders Number of setups Machine hours Number of inspections $1,286,500 961,200 5,185,800 754,000 41,500 17,800 120,600 29,000 Activity-Based Overhead Rate $31/order $54/setup $43/hour $26/inspection The cost drivers used for each product were: Cost Drivers Royale Majestic Total Purchase orders Machine setups Machine hours Inspections 18,000 5.000 75,000 11,000 23,500 12,800 45.600 18,000 41,500 17,800 120,600 29,000