Several years atser reengineering its production process, King Corpocation hired a new controller, Rachael Johnson". She developed an ABC system very similar to the one used by King's chief tival. Part of the reason Johnson developed the ABC system was because King's profits had been declining even though the company had thifted its product mix toward the product that had appeared most proftable under the old system. Before adopting the new ABC syatem, King had used a plantwide overhead rate based on direct labar hours that was developed yoars ago (Click the icon to viow the overhead costs and budgeted data.) Read the reguitements: Requirement 1. Compute the gross profit per wheel it managers rely on the ABC unit cost data. (Enter amounts to two decimal places.) Begin ty computing the total manufacturing cost per wheel for each wheel model. Now coerpute the gross profit per wheed for each wheel model. 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.) 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.) King Corporation Gross profit per unit usinc olantwide overhead rate Requirement 3. Which product line is more profitable for the company? Requirement 4. Why might the controlier have expected ABC to pass the cost-beneft test? Were there any warning signs that the company's old direct-lobonbased allocition sysbem was broken? The ASC sysiem is licely to pass the cost-benefit test because King Corporation manufactures Data table Manufacturina Overhead Costs per Unit: The following data are budgeted for the company's Standard and Deluxe models for next year: Several years atser reengineering its production process, King Corpocation hired a new controller, Rachael Johnson". She developed an ABC system very similar to the one used by King's chief tival. Part of the reason Johnson developed the ABC system was because King's profits had been declining even though the company had thifted its product mix toward the product that had appeared most proftable under the old system. Before adopting the new ABC syatem, King had used a plantwide overhead rate based on direct labar hours that was developed yoars ago (Click the icon to viow the overhead costs and budgeted data.) Read the reguitements: Requirement 1. Compute the gross profit per wheel it managers rely on the ABC unit cost data. (Enter amounts to two decimal places.) Begin ty computing the total manufacturing cost per wheel for each wheel model. Now coerpute the gross profit per wheed for each wheel model. 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.) 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.) King Corporation Gross profit per unit usinc olantwide overhead rate Requirement 3. Which product line is more profitable for the company? Requirement 4. Why might the controlier have expected ABC to pass the cost-beneft test? Were there any warning signs that the company's old direct-lobonbased allocition sysbem was broken? The ASC sysiem is licely to pass the cost-benefit test because King Corporation manufactures Data table Manufacturina Overhead Costs per Unit: The following data are budgeted for the company's Standard and Deluxe models for next year
