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Kingbird Electronics manufactures two HD television models: the Royale, which sells for $ 1.512, and a new model, the Majestic, which sells for $ 1.188. The production costs calculated per unit under traditional costing for each model in 2022 were as follows: Royale $ 648 Majestic $ 340 Traditional Costing Direct materials Direct labour ($ 20 per hour) Manufacturing overhead (S 35 per direct labour hour) Total per unit cost 100 80 175 140 $923 $ 560 In 2022. Kingbird manufactured 21.600 units of the Royale and 10,800 units of the Majestic. The overhead rate of $ 35 per direct labour hour was determined by dividing total estimated manufacturing overhead of $ 5.3 million by the total direct labour hours 151,200) for the two models. Under traditional costing, the gross profit on the models was $ 589 for the Royale or ($ 1,512 - $ 923), and $ 628 for the Majestic or ($ 1.188-5560). 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 Kingbird'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: Estimated Overhead Estimated Use of Cost Drivers Activity-Based Overhead Rate $ 810,000 27,000 $ 30 per order Activity Cost Pools Purchasing Machine set-ups Machining Quality control Cost Drivers Number of orders Number of set-ups Machine hours Number of inspections 648.000 21,600 $30 per set-up 3,348,000 108,000 $31 per hour 486,000 5,400 $ 90 per inspection (b) 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 Majestic Per unit cost $ Gross profit per unit $ The cost drivers used for each product were as follows: Cost Drivers Royale Majestic Total Purchase orders 12,150 14,850 27,000 Machine set-ups 10,800 10,800 21,600 Machine hours 43,200 64,800 108,000 Inspections 2,430 2,970 5,400

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