Schultz Electronics manufactures two ultra high-definition television models: the Royale which sells for $ 1,480, and a new model, the Majestic, which sells for $1,270. The production cost computed per unit under traditional costing for each model in 2017 was as follows. Traditional Costing Royale Majestic $650 $420 120 100 Manufacturing overhead ($ 42 per DLH) 252210 $1,022 $730 Direct materials Direct labor ($20 per hour) Total per unit cost In 2017, Schultz manufactured 25,000 units of the Royale and 10,000 units of the Majestic. The overhead rate of $42 per direct labor hour was determined by dividing total expected manufacturing overhead of $ 8,449,220 by the total direct labor hours (200,00D) for the two models. Under traditional costing, the gross profit on the models was Royale $458 ($ 1,480 $1,022) and Majestic $540 ($ 1,270- $ 730). 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, 2017. Activity Cost Pools Estimated Expected Use of Activity-Based Overhead Cost Drivers Overhead Rate Cost Drivers 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, 2017. Activity Cost Pools Estimated Expected Use of Activity-Based Overhead Cost Drivers Overhead Rate Cost Drivers Purchasing Number of orders $1,261,700 874,120 5,440,500 Quality control Number of inspections 872,900 40,700 $31/order 16,810 $ 52/setup 120,900 $45/hour 30,100 $29/inspection Machine setups Number of setups Machining achine hours The cost drivers used for each product were: Cost Driverp Royale Majestic Total Purchase orders 17,600 23,100 40,700 Machine setups 4,510 12,300 16,810 Machine hours 75,300 45,600 120,900 Inspections 11,900 18,200 30,100 Machine setups 4,510 12,300 16,810 Machine hours 75,300 45,600 120,900 Inspections 11900 18.200 30,100 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, eg. 12.25. Royale Majestic Total assigmed costs $ Cost per unit Attempts: O of 7 used Check
