Schultz Electronics manufactures two ultra high-definition television models: the Royale which sells for $1.580, and a...
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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 $1.320. The production cost computed per unit under traditional costing for each model in 2020 was as follows Traditional Costing Royale Majestic Direct materials $650 $400 Direct labor ($20 per hour) 120 100 Manufacturing overhead ($42 per DLH) 252 210 Total per unit cost $1,022 $710 In 2020. 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 estimated manufacturing overhead of $8.392.200 by the total direct labor hours (200,000) for the two models. Under traditional costing, the gross profit on the models was Royale $558 ($1,580-$1,022) 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 Activity Cost Pools Estimated Estimated Use of Cost Drivers Overhead Cost Drivers Activity-Based Overhead Rate Purchasing Number of orders $1.329.400 39,100 $34/order Machine setups Number of setups 932.800 17,600 $53/setup Machining Machine hours 5.332.500 118.500 Quality control Number of inspections 797,500 27,500 $45/hour $29/inspection The cost drivers uned for each product were: Cost Drivers Royale Purchase orders Majestic Total 17.000 22.100 39,100 Machine setups 5,000 12.600 17.600 Machine hours 74,000 44.500 118.500 Inspections 10,000 17.500 27,500 (a) 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.es 12.25) Royale Total insigned costs $ Col per unit Majestic 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 $1.320. The production cost computed per unit under traditional costing for each model in 2020 was as follows Traditional Costing Royale Majestic Direct materials $650 $400 Direct labor ($20 per hour) 120 100 Manufacturing overhead ($42 per DLH) 252 210 Total per unit cost $1,022 $710 In 2020. 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 estimated manufacturing overhead of $8.392.200 by the total direct labor hours (200,000) for the two models. Under traditional costing, the gross profit on the models was Royale $558 ($1,580-$1,022) 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 Activity Cost Pools Estimated Estimated Use of Cost Drivers Overhead Cost Drivers Activity-Based Overhead Rate Purchasing Number of orders $1.329.400 39,100 $34/order Machine setups Number of setups 932.800 17,600 $53/setup Machining Machine hours 5.332.500 118.500 Quality control Number of inspections 797,500 27,500 $45/hour $29/inspection The cost drivers uned for each product were: Cost Drivers Royale Purchase orders Majestic Total 17.000 22.100 39,100 Machine setups 5,000 12.600 17.600 Machine hours 74,000 44.500 118.500 Inspections 10,000 17.500 27,500 (a) 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.es 12.25) Royale Total insigned costs $ Col per unit Majestic
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