Several years after reengineering its production process, Trudell Corporation hired a new controller Jane Smith. She developed an ABC system very similar to the one used by Truder's chief rival. Part of the reason Smith developed the ABC system was because Trudel'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 Requirement 1. Compute the gross profit per wheel it 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 Direct materials 31.00 4725 Director 45 80 5250 Manufacturing overhead 25300 419.00 Total manufacturing cost 329.00 518.75 Now compute the gross proper whool for each wheel model Trudell Corporation Gross profit per unit using ABC data Trudell Corporation Gross profit per unit using ABC data Standard Deluxe Sales price 490.00 660.00 Total manufacturing costs 329.80 419.00 160.20 Gross profit 241.00 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.) Trudell 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 alocation cost data. (Enter amounts to two decimal places.) Trudell Corporation Gross profit per unit using plantwide overhead rate Standard Deluxe Gross profit Requirement 3. Which product line is more profitable for the company The standard modelis e delle model Activity based conting data generally are cout data generated by a plannwide overhead alocation rate. ABC systems have cost catagorion (act), each with two own allocation base. And cost assignments represent the cost of resources consumed to manufacture and support products Requirement 4. Why might the controller have expected ABC to pass the contbenet ter were there any warning signs that the company's old direct labor-based alocation system was broken? The ABC wystem is likely to pass the cost-benett bost because Trudell Corporation manufacturer Data Table Manufacturing Overhead Costs per Unit: Standard Deluxe ABC costs $ 253.00 $ 419.00 Plantwide overhead rate . . . . . $ 273.00 $ 399.00 The following data are budgeted for the company's Standard and Deluxe models for next year: Standard Deluxe 490.00 $ 660.00 Sales price per wheel ..... $ Direct materials per wheel .... $ Direct labor per wheel ........ $ 31.00 $ 47.25 45.80 $ 52.50 Print Done