Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Swifty Electronics manufactures two ultra-high-definition television models: the Royale, which sells for $1.480, and a new model, the Majestic, which sells for $ 1.270. The

image text in transcribed
image text in transcribed
image text in transcribed
Swifty Electronics manufactures two ultra-high-definition television models: the Royale, which sells for $1.480, and a new model, the Majestic, which sells for $ 1.270. The production cost computed per unit under traditional costing for each modelin 2022 was as follows Traditional Costing Royale Majestic Direct materials $ 640 $430 120 100 Direct labor ($20 per hour) Manufacturing overhead ($ 39,437 per DLH) Total per unit cost 237 197 $ 997 $ 727 In 2022, Swifty manufactured 25,000 units of the Royale and 10,000 units of the Majestid The overhead rate of $ 39,437 per direct labor hour was determined by dividing total estimated manufacturing overhead of $ 7,887,400 by the total direct labor hours (200,000) for the two models. Under traditional costing the gross profit on the models was Royale $ 483 ($ 1,480 - $ 997) and Majestic $ 543 ($ 1,270 - $ 727). 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 Swifty'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 Estimated Overhead Estimated Use of Cost Drivers Activity-Based Overhead Rate Cost Drivers Purchasing $ 1.200.000 39,000 $ 31/order Number of orders Machine setups Number of setups 980,500 18,500 $ 53/setup Machining 4,883.100 $ 41/hour Machine hours 119.100 Quality control Number of inspections 814,800 29.100 $ 28/inspection The cost drivers used for each product were: Cost Drivers Royale Majestic Total 17.000 22.000 39,000 Purchase orders Machine setups Machine hours 6,000 12,500 18,500 74,000 45.100 119,100 Inspections 11,000 18,100 29.100 Arslon the total 2017 manufacturing overhead couts to the two products using activity-based cortino (ADC) and determine the overhead cost per unit. (Round cost per unit to 2 decional Royale Majest Totalled costs Cent per un LINK TO TEXT VIDEO SIMILAR POLER Calculate cost per unit of each model using ABC costing. (Round answers to 2 decimal places, e.g. 12.25.) Moyale Majestic Cost per Calculate pron proft of each modeling ABC couting. (Round answers to 2 decimal places. e.4. 12.25.) Royale Majesti Oros pront LIETOTEKT VIDEO: SRILAR

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas

9th Edition

125972266X, 9781259722660

Students also viewed these Accounting questions

Question

which of the following is true about global administrators?

Answered: 1 week ago