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Schultz Electronics manufactures two ultra high-definition television models: the Royale which sells for $ 1,630 , and a new model, the Majestic, which sells for

Schultz Electronics manufactures two ultra high-definition television models: the Royale which sells for $ 1,630, and a new model, the Majestic, which sells for $ 1,270. 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 ($20 per hour)
120
100
Manufacturing overhead ($ 43 per DLH)
258
215
Total per unit cost
$ 1,028
$ 715
In 2020, Schultz manufactured 25,000 units of the Royale and 10,000 units of the Majestic. The overhead rate of $ 43 per direct labor hour was determined by dividing total estimated manufacturing overhead of $ 8,603,900 by the total direct labor hours (200,000) for the two models. Under traditional costing, the gross profit on the models was Royale $ 602 ($ 1,630 $ 1,028) and Majestic $ 555 ($ 1,270 $ 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, 2020.
Activity Cost Pools
Cost Drivers
Estimated Overhead
Estimated Use of Cost Drivers
Activity-Based Overhead Rate
Purchasing Number of orders $ 1,379,000 39,400 $ 35/order
Machine setups Number of setups 988,200 18,300 $ 54/setup
Machining Machine hours 5,413,500 120,300 $ 45/hour
Quality control Number of inspections 823,200 29,400 $ 28/inspection
The cost drivers used for each product were:
Cost Drivers
Royale
Majestic
Total
Purchase orders 17,000 22,400 39,400
Machine setups 5,000 13,300 18,300
Machine hours 75,000 45,300 120,300
Inspections 11,000 18,400

29,400

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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