= Homework: Chapter 4 Homework (required) ( Question 7, E4-41B (similar to) Part 1 of 6 HW Score: 34.2%. 2.39 of 7 points O Points: 0 of 1 O Save Several years after reengineering its production process, Zippy Corporation hired a new controller, Jane Smith. She developed an ABC system very similar to the one used by Zippy's chief rival. Part of the reason Smith developed the ABC system was because Zippy's profits had been declining even though the company had shifted its product mix toward the product that had appeared most profitable under the old system. Before adopting the new ABC system, Zippy had used a plantwide overhead rate based on direct labor hours that was developed years ago (Click the icon to view the overhead costs and budgeted data) Read the requirements Data table Requirement 1. Compute the gross profit per Wheel if managers rely on the ABC unit cost data. (Enter amounts to two decimal places. Begin by computing the total manufacturing cost per Wheel for each wheel model Zippy Corporation Total cost per unit using ABC data Standard Deluxe Manufacturing Overhead Costs per Unit: Standard Deluxe ABC costs S 199,50 S 372 50 Plantwide overhead rate......S 237,80 S 33440 The following data are budgeted for the company's Standard and Deluxe models for next year Deluxe Total manufacturing cost Standard Sales price per wheel ........S 490.00 S Direct materials per wheel ....S 31.00 S Direct labor per wheel...... .S 45.70 S 800.00 48.75 50.50 Requirements Print Done 1. Compute the gross profil per wheel if managers rely on the ABC unit cost dala. 2. Compute the gross profil per weel if the managers rely on the plantwide allocation cost dala. 3. Which product line is more profitable for the company? 4. Why might the controler have expected ABC to pass the cost-benefit teat? Were there any waming signs that the company's old direct-labor-based allocation system was broken? Print Done