Several years after reengineering its production process, Biltmore Corporation hired a new controller, Christine Erickson. She developed an ABC system very similar to the one used by Biltmore's chief rival. Part of the reason Erickson developed the ABC system was because Biltmore's profits had been declining even though the company had shifted its product mix toward the product that had appeared most profitable under the old system. Before adopting the new ABC system, Biltmore had used a plantwide overhead rate based on direct labor hours that was developed years ago. (Click the icon to view the overhead costs and budgeted data.) Read the requirements. Requirement 1. Compute the gross profit per wheel if managers rely on the ABC unit cost data. (Enter amounts to two decimal places.) Begin by computing the total manufacturing cost per wheel for each wheel model. Biltmore Corporation Total cost per unit using ABC data Standard Deluxe i Data Table Manufacturing Overhead Costs per Unit: Standard Deluxe ABC costs. $ Plantwide overhead rate ...... $ 300.00 $ 340.60 $ 486.00 445.40 The following data are budgeted for the company's Standard and Deluxe models for next year: Total manufacturing cost Now compute the gross profit per wheel for each wheel model. Biltmore Corporation Gross profit per unit using ABC data Standard Deluxe Choose from any list or enter any number in the input fields and then continue to the next question. Standard Deluxe Sales price per wheel ........ $ Direct materials per wheel .. Direct labor per wheel . . . . . . . . $ 450.00 $ 650.00 $ 30.00 $ 45.80 $ 46.25 51.50 Print Done ? Several years after reengineering its production process, Biltmore Corporation hired a new controller, Christine Erickson. She developed an ABC system very similar to the one used by Biltmore's chief rival. Part of the reason Erickson developed the ABC system was because Biltmore's profits had been declining even though the company had shifted its product mix toward the product that had appeared most profitable under the old system. Before adopting the new ABC system, Biltmore had used a plantwide overhead rate based on direct labor hours that was developed years ago. (Click the icon to view the overhead costs and budgeted data.) Read the requirements. Biltmore Corporation Gross profit per unit using ABC data Standard Deluxe Gross profit Requirement 2. Compute the gross profit per wheel if the managers rely on the plantwide allocation cost data. Begin by computing the total manufacturing costs. (Enter amounts to two decimal places.) Biltmore Corporation Total cost per unit using plantwide overhead rate Standard Deluxe Choose from any list or enter any number in the input fields and then continue to the next question. ? Several years after reengineering its production process, Biltmore Corporation hired a new controller, Christine Erickson. She developed an ABC system very similar to the one used by Biltmore's chief rival. Part of the reason Erickson developed the ABC system was because Biltmore's profits had been declining even though the company had shifted its product mix toward the product that had appeared most profitable under the old system. Before adopting the new ABC system, Biltmore had used a plantwide overhead rate based on direct labor hours that was developed years ago. (Click the icon to view the overhead costs and budgeted data.) Read the requirements. Biltmore Corporation Total cost per unit using plantwide overhead rate Standard Deluxe Total manufacturing cost Now compute the gross profit per wheel for each wheel model if the managers rely on the plantwide allocation cost data. (Enter amounts to two decimal places.) Gross profit Biltmore Corporation Gross profit per unit using plantwide overhead rate Standard Deluxe Several years after reengineering its production process, Biltmore Corporation hired a new controller, Christine Erickson. She developed an ABC system very similar to the one used by Biltmore's chief rival. Part of the reason Erickson developed the ABC system was because Biltmore's profits had been declining even though the company had shifted its product mix toward the product that had appeared most profitable under the old system. Before adopting the new ABC system, Biltmore had used a plantwide overhead rate based on direct labor hours that was developed years ago. (Click the icon to view the overhead costs and budgeted data.) Read the requirements. Now compute the gross profit per wheel for each wheel model if the managers rely on the plantwide allocation cost data. (Enter amounts to two decimal places.) Biltmore Corporation Gross profit per unit using plantwide overhead rate Standard Deluxe Gross profit Requirement 3. Which product line is more profitable for the company? The standard model is the deluxe model. Activity-based costing data generally are its own allocation base. ABC cost assignments cost data generated by a plantwide overhead allocation rate. ABC systems have represent the cost of resources consumed to manufacture (and support) products. cost categories (activities), each with Requirement 4. Why might the controller have expected ABC to pass the cost-benefit test? Were there any warning signs that the company's old direct-labor-based allocation system was broken? The ABC system is likely to pass the cost-benefit test because Biltmore Corporation manufactures The old cost system appears "broken" because profits have been declining even though the company