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 $1,320. The production cost computed per unit under traditional costing for each model in 2020 was as follows. Traditional Costing Direct materials Direct labor ($20 per hour) Manufacturing overhead ($40 per DLH) Total per unit cost Royale $610 120 Majestic $410 100 200 $710 240 $970 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 $8,066,500 by the total direct labor hours (200,000) for the two models. Under traditional costing the gross profit on the models was Royale $560 ($1,530 - $970) and Majestic $610 ($1,320 - $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. HW-Chapter 4 Question 4 of 5 074 Activity Cost Pools Purchasing Machine setups Machining Quality control Cost Drivers Number of orders Number of setups Machine hours Number of inspections Estimated Overhead $1,286,400 991,100 5,061,000 728,000 Estimated Use of Cost Drivers 40,200 18,700 120,500 Activity-Based Overhead Rate $32/order $53/setup $42/hour $26/inspection 28.000 The cost drivers used for each product were: Cost Drivers Purchase orders Machine setups Machine hours Inspections Royale 17,000 6,000 75,000 10,000 Majestic 23,200 12.700 45,500 18,000 Total 40,200 18,700 120,500 28,000 (a) 074 (a) X Your answer is incorrect. 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 $ 4402700 $ 3854100 Cost per unit 176,11 $ 385.41 e Textbook and Media Save for Later Attempts: 1 of 5 used Submit Answer (11)