PART 1-6

Several years after reengineering its production process, King Corporation hired a new controller, Jaxson Enckson. She developed an ABC syster very similar to the one used by King's chief rival, Part of the reason Erickson developed the ABC system was because King's profits had been. declining even though the company had shifted its product mix toward the product that had appeared most profitablo under the old system. Before adopting the new ABC system, King had used a plantwide overhead rate based on direct labor hours that was developed years aga. View the overhead costs and budgeted date. Read the reguirements. Requirement 1. Compute the gross profit per wheel if managers rely on the ABC unit cost data (Enter amo is to two decimal places ) Begin by computing the total manutacturing cost per wheel for each wheel model 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