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There are so many numbers, i'm a bit confused on which im supposed to leave out and which im supposed to use. Problem 17-2A Schultz
There are so many numbers, i'm a bit confused on which im supposed to leave out and which im supposed to use.
Problem 17-2A Schultz Electronics manufactures two large-screen television models: the Royale which sells for $1,526, and a new model, the Majestic, which sells for $1,315. The production cost computed per unit under traditional costing for each model in 2014 was as follows Traditional Costing Royale Majestic Direct materials Direct labor ($20 per hour) Manufacturing overhead ($41 per DLH) Total per unit cost $620 120 246 $986 $420 100 205 $725 In 2014, Schultz manufactured 25,000 units of the Royale and 10,000 units of the Majestic. The overhead rate of $41 per direct labor hour was determined by dividing total expected manufacturing overhead of $8,188,420 by the total direct labor hours (200,000) for the two models Under traditional costing, the gross profit on the models was Royale $540 or ($1,526 $986), and Majestic $590 or ($1,315 - $725). 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 Schultz'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, 2014Step by Step Solution
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