Problem 4 2A a, b1 b2 (Video) Schultz Electronics manufactures two ultra high definition 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 $640 $400 Direct labor ($20 per hour) 120 100 Manufacturing overhead ($41 per DLH) 246 205 Total per unit cost $1,006 $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 $8,114,400 by the total direct labor hours (200,000) for the two models Under traditional costing, the gross profit on the models was Royale $524 ($1,530 $1,006) 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 Schultzs 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 Activity Based Overhead Rate Purchasing Number of orders $1,299,200 40,600 $32 order Machine setups Number of setups 1,067,000 19,400 $55 setup Machining Machine hours 5,035,800 119,900 $42 hour Quality control Number of inspections 712,400 27,400 $26 inspection The cost drivers used for each product were Cost Drivers Royale Majestic Total Purchase orders 17,000 23,600 40,600 Machine setups 6,000 13,400 19,400 Machine hours 75,000 44,900 119,900 Inspections 11,000 16,400 27,400 Assign the total 2020 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 $ $ Click if you would like to Show Work for this question Open Show Work By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor Question Attempts Unlimited SAVE FOR LATER SUBMIT ANSWER

Question

Problem 4 2A a, b1 b2 (Video) Schultz Electronics manufactures two ultra high definition 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 $640 $400 Direct labor ($20 per hour) 120 100 Manufacturing overhead ($41 per DLH) 246 205 Total per unit cost $1,006 $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 $8,114,400 by the total direct labor hours (200,000) for the two models  Under traditional costing, the gross profit on the models was Royale $524 ($1,530 $1,006) 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 Schultzs 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 Activity Based Overhead Rate Purchasing Number of orders $1,299,200 40,600 $32 order Machine setups Number of setups 1,067,000 19,400 $55 setup Machining Machine hours 5,035,800 119,900 $42 hour Quality control Number of inspections 712,400 27,400 $26 inspection The cost drivers used for each product were  Cost Drivers Royale Majestic Total Purchase orders 17,000 23,600 40,600 Machine setups 6,000 13,400 19,400 Machine hours 75,000 44,900 119,900 Inspections 11,000 16,400 27,400 Assign the total 2020 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 $ $ Click if you would like to Show Work for this question  Open Show Work By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor  Question Attempts  Unlimited SAVE FOR LATER SUBMIT ANSWER

Accepted Answer

The Answer is in the image, click to view ...

Question

Problem 4-2A a, b1-b2 (Video) Schultz Electronics manufactures two ultra high-definition television models: the Royale which sells for $1,530, and a new model, the Majestic,

Step by Step Solution

Step: 1

Get Instant Access to Expert-Tailored Solutions

Step: 2

Step: 3

Ace Your Homework with AI

Students also viewed these Accounting questions

Question

Question

Question

Question

Question

Question

Question

Question

Question