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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 $1,270. The

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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 $1,270. The production cost computed per unit under traditional costing for each model in 2020 was as follows. Traditional Costing Direct materials Direct labor ($20 per hour) Manufacturing overhead ($41 per DLH) Total per unit cost Royale $600 120 Majestic $430 100 205 $735 246 $966 In 2020, 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 estimated manufacturing overhead of $8,135,200 by the total direct labor hours (200,000) for the two models. Under traditional costing, the gross profit on the models was Royale $664 ($1,630 - $966) and Majestic $535 ($1,270 - $735). 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. Cost Drivers Activity Cost Pools Purchasing Machine setups Machining Quality control Number of orders Number of setups Machine hours Number of inspections Estimated Overhead $1,258,600 1,026,000 5,035,800 814,800 Estimated Use of Cost Drivers 40,600 19.000 119,900 29,100 Activity-Based Overhead Rate $31/order $54/setup $42/hour $28/inspection The cost drivers used for each product were: Cost Drivers Purchase orders Machine setups Machine hours Inspections Royale 18,000 5,000 74,000 11,000 Majestic 22,600 14,000 45,900 18,100 Total 40,600 19,000 119,900 29,100 (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, e.g. 12.25.) Royale Majestic Total assigned costs $ $ Cost per unit $ $

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