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Schultz Electronics manufactures two ultra high-definition television models: the Royale which SCS TU $1.580, and a new model, the Majestic, which sells for $1.320. The

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Schultz Electronics manufactures two ultra high-definition television models: the Royale which SCS TU $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. Royale Majestic $640 $430 Traditional Costing Direct materials Direct labor ($20 per hour Manufacturing overhead ($42 per DLH) Total per unit cost 120 100 252 210 $1.012 $740 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 $8,410,600 by the total direct labor hours (200,000) for the two models. Under traditional costing, the gross profit on the models was Royale $568 ($1.580 - $1,012) and Majestic $580 ($1,320 - $740). 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 Estimated Overhead Estimated Use of Cost Drivers Activity Cost Pools Purchasing Machine setups Activity-Based Overhead Rate $35/order $1.428,000 40,800 Cost Drivers Number of orders Number of setups Machine hours Number of inspections 1.058.400 19,600 $54/setup 5,155,700 119.900 $43/hour Machining Quality control 768,500 26,500 $29/inspection The cost drivers used for each product were: Royale Majestic Total Cost Drivers Purchase orders Machine setups 18,000 22.800 40.800 6,000 13,600 19.600 Machine hours 75,000 44,900 119.900 Inspections 10,000 16.500 26,500 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, eg. 12.25.) Royale Majestic $ Total assigned costs $ $ Cost per unit $ eTextbook and Media 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 $ e Textbook and Media Calculate gross profit of each model using ABC costing. (Round answers to 2 decimal places, e.g. 12.25.) Royale Majestic Gross profit $

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