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.) Data Table Begin by computing the total manufacturing cost per wheel for each wheel model. Manufacturing Overhead Costs per Unit: Biltmore Corporation Total cost per unit using ABC data Standard Standard Deluxe Deluxe ABC costs.. $ 300.00 $ 486.00 Plantwide overhead rate.. .$ 340.60 $ 445.40 The following data are budgeted for the company's Standard and Deluxe models for next year: Total manufacturing cost Standard Deluxe $ 450.00 $ 650.00 Now compute the gross profit per wheel for each wheel model. Sales price per wheel Direct materials per wheel Direct labor per wheel.. $ 30.00 $ 46.25 Biltmore Corporation Gross profit per unit using ABC data $ 45.80 $ 51.50 Standard Deluxe 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 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. E (Click the icon to view the overhead costs and budgeted data.) Read the requirements. 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 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.) 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? cost categories (activities), each with The standard model is the deluxe model. Activity-based costing data generally are cost data generated by a plantwide overhead allocation rate. ABC systems have its own allocation base. ABC cost assignments v represent the cost of resources consumed to manufacture and support) products. 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