Refer to your answers in E4 26A In addition to the
Refer to your answers in E4-26A. In addition to the manufacturing overhead costs, the following data are budgeted for the company’s Standard and Deluxe models for next year:
Requirements
1. Compute the gross profit per wheel if managers rely on the ABC unit cost data computed in E4-26A.
2. Compute the gross profit per wheel if the managers rely on the plantwide allocation cost data.
3. Which product line is more profitable for Enke?
4. Why might controller Natalie Babin have expected ABC to pass the cost-benefit test? Were there any warning signs that Enke’s old direct-labour-based allocation system was broken?
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