- Weygandt, Managerial Accounting, 8e Help System Announcements NEXT Problem 4-2A a, b1-b2 (Video) Schultz Electronics manufactures two ultra high-definition television models: the Royale which sells for $1,580, and a new model, the Majestic, which sells for $1,320. The production cost computed per unit under traditional costing for each model in 2020 was as follows. Royale $640 120 Majestic $430 100 Traditional Costing Direct materials Direct labor ($20 per hour) Manufacturing overhead ($42 per DLH) Total per unit cost 252 $1.012 In 2020. Schultz manufactured 25,000 units of the Royale and 10,000 units of the Majestic. The overhead rate of $42 per direct labor hour was determined by dividing total estimated manufacturing overhe 1 of $8,410,600 by the total direct labor hours (200,000) for the two models. Under traditional costing, the gross profit on the models was Royale $56B (51,580 - $1,012) and Majestic $580 ($1,320 - $740). Because of this difference management is considering phasing out the Royale model and increasing the production of the Majestic model Before finaliping its decision management asks Schutz'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, 2020 Activity Estimated Estimated Use of Activity-Based Cost Pools Cost Drivers Overhead Cost Drivers Overhead Rate Purchasing Number of orders $1.428,000 40,000 $35/order Machine setups Number of setups 1.050.400 19,600 554/setup Machining Machine hours 5,155,700 119.900 543/hour 26,500 768,500 Quality control Number of inspections $29/inspection The cost drivers used for each product were Cost Drivers Purchase orders Machine setups Machine hours Inspectors Royale 10,000 6,000 75.000 10,000 Majestic 22.000 13,600 44,900 16,500 Total 10.800 19,600 119.900 26,500 Weygandt, Managerial Accounting, se Help System Announcements The cost drivers used for each product were: CALCULATOR PRINTER VERSION BACK NEXT Total Cost Drivers Purchase orders Machine setups Machine hours Inspections Royale 18,000 6,000 75,000 10,000 Majestic 22,800 13,600 44,900 16,500 40,800 19,600 119,900 26,500 Assign the total 2020 manufacturing overhead costs to the two products using activity based costing (ABC) and determine the overhead cost per unit. (Round cost per unit to 2 decimal places, e.g. 12.25.) Royale Majestic Total assigned costs Cost per unit ecimal places, o. 12.25.) Calculate cost per unit of each model using ABC costing (Round answer Royale Majestic Cost per units Calculate gross profit of each model using ABC costing (Round answers to 2 decimal places, e.. 12.25.) Royale Majestic Gross profits Click if you would like to show Work for this question: Open Show Work
