Homework: Chapter 4 homework Score: 0.86 of1 pt 5 of 5 (5 complete) HW Score: 77.27 % , 3.86 of E4-26A (similar to) EQuestion Help Several years aher reengineering its production process, King Corporation hired a new controler, Jane Smith She developed an ABC system very similar to the one used by King's chief rival Part of the reason Smith developed the ABC syste was because King's profits had been declining even though the company had shited its product mix toward the product that had appeared most profitable under the old system Bafore adopting the new ABC system overhead rate based on direct labor hours that was developed years ago. (Click the icon to view the overhead costs and budgeted data) King had used a plantwid Data Table Read the requirements Standard Delure Direct materials 31.50 $ 47 25 Manufacturing Overhead Costs per Unit Direct labor 52.50 Standard Deluxe Requirementh 45.10 Manulacturing overhead 283 40 370.60 240 50 413 50 ABC costs 360.00 470 35 Plantwide overhead rate 283 40 $ 370.60 1. Compute the gross profit per wheel f managers rely on the ABC unit cost c 2. Compute the gross proft per whoel if the managers rely on the plantwide all Total manufacturing cost The following data are budgeted for the company's Standard and Deluxe models for next year Now compute the gross proft per wheel for each wheel model if the managers rely on th data 3. Which product ine is more profable for the company?" 4. Why might the controler have expected ABC to pass the cost-beneft test? waming signs that the company's old direct-labor-based allocation system n King Corporation Standard Deluxe Gross profit per unit using plantwide overhead rate Sales price per wheel 470.00 $ 640.00 Standard Delure Direct materials per wheel 31.50 $ 47 25 Sales pricer 470.00 S 640 00 Direct labor per wheel 45.10 52.50 Prints Done 470.35 Total manufacturing costs 300.00 110.00 S 169.65 Print Done Gross pro Requirement 3. Which product line is more profitable for the company? The standard model is the delxe model. Activity-based costing data generally are more accurato than cost data ganerated by a plantwide overhead allocation rate. AlBC systems have cost categories (activities), each with ts own allocasion base. ABC cost assignments represent the cost of resources consumed to manutacture (and support) products. Click to select your answers) and then click Check Answer part remaining Clear All Check Answer MacBook Pro esc bb 2 % & C O - V data King Corporation Gross profit per unit using plantwide overhead rate 3. Which product line is more proitable for the oompany 4 Why might the controller have expected ABC to pass the cost-bener waming signs that the companys old direct-labor-based allocation s Standard Deluxe Sales price per wheel 470.00 $ 640.00 Standard Delure Direct materials per wheel S 31.50 $ 47 25 Sales prices 470 00 S 640 00 Direct labor per wheel 45.10 S 52.50 Print Done Total manufactturing costs 360.00 470 35 110.00 S 169.65 Oross prot Print Done Requirement 3. Which product line is more proitable for the company? The standard model is the delue model. Activity-based costing data generally are more acourate than cost data generated by a plantaide overhead allocation rate ABC systems have cost categories (activites) each with ts own alocation base ABC cost assignments represent the cost of resources consumed to manufacture (and support) products Click to select your answers and then click Check Answer part 1aning Clear Al Check Answer MacBook Pro esc % 7 2 3 4 7 C 1 de W E R T P A S D F G H J K L C V B M option command Plantwide ove Manufacturing overhead 470.35 360.00 $ The following d and Deluxe mo Total manufacturing cost Now compute the gross profit per wheel for each wheel model if the managers rely on th King Corporation Sales price per Gross profit per unit using plantwide overhead rate Deluxe Direct materials Standard 640,00 Direct labor per w 470.00 S Sales price 470.35 360.00 Total manufacturing costs 169.65 110.00 $ Gross profit Requirement 3. Which product line is more profitable for the company? the deluxe model. Activity-based costing data generally are more a The standard model is (activities), each with it ist assignments represent the cost of reso just as profitable as Click to select your an k Answer less profitable than more profitable than 1 part remaining Ma esc F1 000 F2 F3 F4 F5 # $ 1 2 3 4 5 6 Q W R A S ck T LLU 3Ou.UU The following data are budgeted for the company's Standard and Deluxe models for next year wheel for each wheel model if the managers rely on th Standard Deluxe King Corporation 640.00 470.00 $ $ unit using plantwide overhead rate Sales price per wheel S 31.50 $ 47.25 Direct materials per wheel Standard Deluxe 640.00 S 45.10 $ 52.50 470.00 $ Direct labor per wheel A70 35 360.00 110.00 $ Print Done do not accurately less accurately line is more profitable for the compan more accurately the deluxe model. Activ erally are more accurate than cost data generated by a planty llocntion base. 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Why might the controller have expected ABC to pass the cost-benefit t warning signs that the company's old direct-labor-based allocation syst Deluxe Standard 470.00 $ 640.00 neel . $ 31.50 S 47.25 er wheel .... $ Print Done wheel 45.10 S 52.50 Print Done cost categories ore accurate than cost data generated by a plantwide overhead allocation rate. ABC systems have of resources consumed to manufacture (and support) products less more the same Clear All MacBook Pro DII DD F7 F8 F9 F10 F11 F12 & + 7 8 delete { Y U P J K ret ? N M is