Several years after reengineering its production process, Deing Corporation hired a new contro Alana Metre She developed ARC system very similar to the one used by Dering's chief val. Part of the reason Metzgar developed the ABC system was because Deting's profs 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. Dettling 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 amounts to two decapaces) Requirement i Compute the gross profit per wheel managers rely on the ABC unit cost de Begin by computing the total manufacturing cost per Wheel for each wheel model Dettling Corporation Total cost per unit using ABC data Standard Deluxe Total manufacturing cost 1. Compute the gross profit per wheel if managers rely on the ABC unit cost data. 2. Compute the gross profit per wheel if the managers rely on the plantwide allocation cost data. 3. Which product line is more profitable for the company? 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? Manufacturing Overhead Costs per Unit _ Standard Deluxe ABC costs ..................$ 199.50 $ 372.50 Plantwide overhead rate 237.60 $ 334.40 The following data are budgeted for the company's Standard and Deluxe models for next year: Standard Deluxe Sales price per wheel ........$ 460.00 $ 630.00 Direct materials per wheel 33.50 $ 48.00 Direct labor per wheel 45.70 $ 52.00