Help please! I need this done Problem 17-2A Schulitz Electronies manufactures pr
ID: 2548705 • Letter: H
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Help please! I need this done Problem 17-2A Schulitz Electronies manufactures production cost computed per unit under traditional costing for each model in 2017 was as follows. two uiltra high-definition television models: the Royale which sells for $1,630, and a new model, the Majestic, which sells for $s1 Traditional Costing Royale Majestic Direct materials 650 120 258 1,028 $400 Score Resuits by Study Direct lsbor ($20 per hour) Manufacturing overhead ($43 per DU) Total per unit cost 215 $715 In 2017, Schultz manufactured 25,000 units of the Royale and 10,000 units of the Majestic. The overhead rate of $43 pér direct iabor hour was determined by dividing total expected manufacturing overhead of $8,598,060 by the total direct labor hours (200,000) for the two models. Under tredtional costing, the gross profit on the modeis was Royale $602 (51,630-$1,028) and Majestic $555 (1,270-$715). Because of this difference, management s considering phasing out the Royale model and increasing the production of the Majestic model. Before finalizing its decision, management asks Schultzr's contreller to prepare an analysis using activity-based costing (ABC). The controller acoumulabes the folowing information about overhead for the year ended December 31, 2017 Estimated Expected Use of Activity-Based Cost Pools Cost Drivers Cost Drivers v 19,100 $35/order 18,740SAysetup 20,000 $45hour 29,200 $2Minspection 1,368,500 011.960 Number of orders Machine setups Machining Quality control Number of setups Machine hours Number of inspections 817,600 The cost drivers used for each product were Royale Tetal 9,100 18,740 Purchase orders Machine setups Machine hours Iespections 16,700 ,440 4,700 22,400 13,300 45,300120,000 18,400Explanation / Answer
a Royale Majestic Overhead Rate Rate Drivers Used Cost assigned Drivers Used Cost assigned Total Overhead Purchasing 35 16700 584500 22400 784000 39.10 Machine setups 54 5440 293760 13300 718200 28.91 Machining 45 74700 3361500 45300 2038500 154.29 Quality control 28 10800 302400 18400 515200 23.36 Total Assigned Costs 4542160 4055900 245.66 Units Produced 25000 10000 Cost per unit 181.7 405.59 Cost per Unit Under ABC Costing Royale Majestic Direct Material 650 400 Direct Labor 120 100 Overhead 181.69 405.59 Total Cost Per Unit 951.69 905.59 Revenue 1630 1270 Expense 951.69 905.59 Profit 678.31 364.41
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