Problem 17-2A Schultz Electronics ma tra higd tion television models: the Royale which sells for $1,630, and a new model, the Majestic, which sells for $1,270. The production cost computed per unit under traditional costir was as follows. each Traditional Costing Royale Majestic Direct materials $650 $400 Direct labor ($20 per hour) 120 100 Manufacturing overhead ($43 per DLH) 258 215 Total per unit cost $715 $1,028 In 2017, Schultz manufactured 25,000 units of the Royale and 10,000 units of the Majestic. The overhead rate of $43 per direct labor hour was determined $8,598,060 by the total direct labor hourss (200,000) for the two models. dividing total expected manufacturing overhead of Under traditional costing, the gross profit on the models was Royale $602 ($1,630 model and increasing the production of the Majestic model $1,028) and Majestic $555 (S1,270 $715). Because of this difference, management is considering phasing out the Royale Before finalizing its decision, management asks Schultz's controller ended December 31, 2017. prepare an alysis using activity-based costing (ABC). The controller accumulates the following information about overhead for the year d Use of tivity-Based Overhead Rate Ex Cost Pools Cost Drivers Cost Drivers Overhead Purchasing Number of orders $1,368.500 39,100 $35/order Number of setups Machine setups $54/setup 1,011,960 18,740 Machining Machine hours 5.400,000 120.000 $45/hour Number of inspections $28/inspection Quality control 817,600 29,200 Cost Drivers Royale Majestic Total Purchase orders Machine setups 16,700 22,400 39,100 5,440 13,300 18,740 Machine hours 74,700 45,300 120,000 Inspections 10,800 18,400 29,200 Assign the total 2017 manufacturing overhead costs to the two products using activity-based costing (ABC) and determine the overhead cost per unit. (Round cost per unit to 2 decimal places, e.g. 12.25. Royale Majestic Total assigned costs Cost per unit Calculate cost per unit of each model using ABC costing. (Round answers to 2 decimal places, e.g. 12.25.) Royale Majestic Cost per unit Calculate gross profit of each model using ABC costing. (Round answers to 2 decimal places, e.g. 12.25.) Royale Majestic Gross profit