50.1K

Verified Solution

Link Copied!

Bonita Electronics manufactures two HD television models; the Royale, which sells for $1,176, and a new model, the Majestic, which sells for \$924. The production costs calculated per unit under traditional costing for each model in 2022 were as follows: In 2022. Bonita manufactured 16,800 units of the Royale and 8,400 units of the Majestic. The overhead rate of $35 per direct labour hour was determined by dividing total estimated manufacturing overhead of $4.1million by the total direct labour hours (117,600) for the two models. Under traditional costing, the gross profit on the modbls was $397 for the Royale or ($1,176$779), and $436 for the Majestic or (\$924 - \$488). 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 Bonita'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 : Before finalizing its decision, management asks Bonita'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: The cost drivers used for each product were as follows: Your answer is incorrect. What was the cost per unit and gross profit of each model using ABC costing? (Round answers to 2 decimal places, e.g. 15.25.)

Answer & Explanation Solved by verified expert

See Answer