Several years after reengineering its production process, Trudell Corporation hired a new controller, Alice Brown. She developed an ABC system very similar to the one used by Trudell's chief rival. Part of the reason Brown developed the ABC system was because Trudell'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, Trudell 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 Data Table Requirement 1. Compute the gross profit per wheel if managers rely on the Begin by computing the total manufacturing cost per wheel for each wheel mg Trudell Corporation Manufacturing Overhead Costs per Unit Requirements Total cost per unit using ABC data Standard Deluxe Standard Deluxe ABC costs $ 199.50 $ 372.50 V Plantwide overhead rate 237.60 $ 334.40 The following data are budgeted for the company's Standard and Deluxe models for next year: 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? Standard Administrative costs Delivery costs Direct labor Direct materials Manufacturing overhead Selling expenses Deluxe $ 470.00 $ 620.00 Sales price per wheel. Direct materials per wheel Direct labor per wheel $ 34.50 $ 46.75 Print Done $ 45.30 $ 52.00 Print Done Several years after reengineering its production process, Trudell Corporation hired a new controller, Alice Brown. She developed an ABC system very similar to the one used by Trudell's chief rival. Part of the reason Brown developed the ABC system was because Trudell'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, Trudell 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 fequirements 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 Trudell Corporation Total cost per unit using ABC data Standard Deluxe V Total manufacturing cost
