Several years after reengineering its production process, King Corporation hired a new controller, Rachael Johnson. She developed an ABC system very similar to the one used by King's

chief rival. Part of the reason Johnson developed the ABC system was because King'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, King had used a plantwide overhead rate based on direct labor hours that was developed years ago.

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. King Corporation Data Table Total cost per unit using ABC data Standard Deluxe Manufacturing Overhead Costs per Unit Standard Deluxe ABC costs $ 258.50 $ 431.50 Plantwide overhead rate...... $ 310.50 $ 379.50 The following data are budgeted for the company's Standard and Deluxe models for next year: Total manufacturing cost Standard Deluxe $ 460.00 $ 630.00 Sales price per wheel Direct materials per wheel Direct labor per wheel .... $ 31.50 $ 48.25 ....... $ 45.00 $ 53.00 Print Done Choose from any list or enter any number in the input fields and then click Check Answer. 5 parts Clear All