Sweet Acacia Electronics manufactures two HD television models: the Royale, which sells for $1,680, and a new model, the Majestic, which sells for $1.320. The production costs calculated per unit under traditional costing for each model in 2022 were as follows: Direct materials Traditional Costing Royale Majestic $720 $376 Direct labour ($20 per hour) 100 80 Manufacturing overhead ($35 per direct labour hour) 175 140 Total per unit cost $995 $596 In 2022, Sweet Acacia manufactured 24,000 units of the Royale and 12,000 units of the Majestic. The overhead rate of $35 per direct labour hour was determined by dividing total estimated manufacturing overhead of $5.9 million by the total direct labour hours (168,000) for the two models. Under traditional costing, the gross profit on the models was $685 for the Royale or ($1.680-$995), and $724 for the Majestic or ($1,320-$596). Because of this difference, management is considering phasing out the Royale model and increasing the production of the Majestic model. Before finalizing its decision, management asks Sweet Acacia's controller to prepare an analysis using activity-based costing (ABC). The controller accumulates the following information about overhead for the year ended December 31, 2022: Activity Cost Pools Cost Drivers Estimated Overhead Estimated Use of Cost Drivers Activity-Based Overhead Rate Purchasing Number of orders $900,000 30,000 $30 per order Machine set-ups Number of set-ups 720,000 24,000 $30 per set-up Under traditional costing, the gross profit on the models was $685 for the Royale or ($1,680-$995), and $724 for the Majestic or ($1,320-$596). Because of this difference, management is considering phasing out the Royale model and increasing the production of the Majestic model. Before finalizing its decision, management asks Sweet Acacia's controller to prepare an analysis using activity-based costing (ABC). The controller accumulates the following information about overhead for the year ended December 31, 2022: Activity Cost Pools Cost Drivers Estimated Overhead Estimated Use of Cost Drivers Activity-Based Overhead Rate Purchasing Number of orders $900,000 30.000 $30 per order Machine set-ups Number of set-ups 720,000 24,000 $30 per set-up Machining Machine hours 3,720,000 120,000 $31 per hour Quality control Number of inspections 540,000 6,000 $90 per inspection The cost drivers used for each product were as follows: Cost Drivers Royale Majestic Total Purchase orders 13,500 16,500 30,000 Machine set-ups 12,000 12,000 24,000 Machine hours 48,000 72,000 120,000 Inspections 2,700 3,300 6,000 What was the cost per unit and gross profit of each model using ABC costing? (Round answers to 2 decimal places, eg. 15.25.) Royale Per unit cost Majestic 104 $ 282 Gross profit per unit $ 37824000 $ 1038 eTextbook and Media Save for Later Attempts: unlimited Submit