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 2017 was as follows.

Traditional Costing		Royale		Majestic
Direct materials		$ 690		$ 410
Direct labor ($20 per hour)		120		100
Manufacturing overhead ($ 41 per DLH)		246		205
Total per unit cost		$ 1,056		$ 715

In 2017, Schultz manufactured 25,000 units of the Royale and 10,000 units of the Majestic. The overhead rate of $ 41 per direct labor hour was determined by dividing total expected manufacturing overhead of $ 8,256,800 by the total direct labor hours (200,000) for the two models. Under traditional costing, the gross profit on the models was Royale $ 474 ($ 1,530 $ 1,056) and Majestic $ 605 ($ 1,320 $ 715). 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 Schultzs 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		Cost Drivers		Estimated Overhead		Expected Use of Cost Drivers		Activity-Based Overhead Rate
Purchasing		Number of orders		$ 1,255,500		40,500		$ 31/order
Machine setups		Number of setups		996,600		18,120		$ 55/setup
Machining		Machine hours		5,155,700		119,900		$ 43/hour
Quality control		Number of inspections		849,000		28,300		$ 30/inspection

The cost drivers used for each product were:

Cost Drivers		Royale		Majestic		Total
Purchase orders		17,700		22,800		40,500
Machine setups		5,820		12,300		18,120
Machine hours		74,300		45,600		119,900
Inspections		11,300		17,000		28,300

(a)

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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.)

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.) 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.) Cost per unit Calculate gross profit of each model using ABC costing. (Round answers to 2 decimal places, e.g. 12.25.) Gross profit LINK TO TEXT