Question 2 Schultz Electronics manufactures two ultra high-definition television models: the Royale which sells for $1,580, 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. Royale $660 Majestic $410 Traditional Costing Direct materials Direct labor ($20 per hour) Manufacturing overhead ($40 per DLH) Total per unit cost 120 100 240 200 $1,020 $710 In 2020, Schultz manufactured 25,000 units of the Royale and 10,000 units of the Majestic. The overhead rate of $40 per direct labor hour was determined by dividing total estimated manufacturing overhead of $8,052,900 by the total direct labor hours (200,000) for the two models. Under traditional costing, the gross profit on the models was Royale $560 ($1,580 $1,020) and Majestic $560 ($1,270 $710). 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 Estimated Overhead Estimated Use of Cost Drivers Cost Drivers Purchasing Machine setups Machining Quality control Number of orders Number of setups Machine hours Number of inspections $1,248,000 918,000 5,077,800 809,100 39,000 18,000 120,900 27,900 Activity-Based Overhead Rate $32/order $51/setup $42/hour $29/inspection The cost drivers used for each product were: Cost Drivers Purchase orders Machine setups Machine hours Inspections Royale 16,000 5,000 76,000 11,000 Majestic 23,000 13,000 44,900 16,900 Total 39,000 18,000 120,900 27,900 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 $ LINK TO TEXT VIDEO: SIMILAR PROBLEM 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 LINK TO TEXT VIDEO. SIMILAR