Several years after reengineering its production process, Biltmore Corporation hired a new controller, Alice Brown. She developed an ABC system very similar to the one used by Biltmore's chief rival. Part of the reason Brown 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.) i Data Table Read the requirements. 0 Requirements Biltmore Corporation Total cost per unit using ABC data Manufacturing Overhead Costs per Unit 1. Compute the gross profit per wheel if managers rely on the ABC unit cost data. Standard Deluxe Standard Deluxe 2. Compute the gross profit per wheel if the managers rely on the plantwide allocation cost Manufacturing overhead 199.50 $ 372.50 ABC costs ................. $ 199.50 $ data. 372.50 Direct materials 31.50 47.50 3. Which product line is more profitable for the company? Plantwide.overhead.rate...... $ 237.60 $ 334.40 4. Why might the controller have expected ABC to pass the cost-benefit test? Were there any Direct labor 45.50 The following data are budgeted for the company's Standard warning signs that the company's old direct-labor-based allocation system was broken? and Deluxe models for next year: 276.50 470.00 Total manufacturing cost Standard Deluxe Print Done Now compute the gross profit per wheel for each wheel model. Sales.price per wheel. ........ $ 470.00 $ 650.00 Biltmore Corporation Direct materials.per.wheel ..... $ 31.50 $ 47.50 Gross profit per unit using ABC data Direct labor.per.wheel......... $ 45.50 $ 50.00 Standard Deluxe Print 50.00 Done Gross profit