Problem 4-2A a, b1-52 (Video) Schultz Electronics manufactures two ultra high-definition television models: the Royale which sells for $1,530, and a new model, the Majestic, which sells for $1,270. The production cost computed per unit under traditional costing for each model in 2020 was as follows. Traditional Costing Direct materials Direct labor ($20 per hour) Manufacturing overhead ($41 per DLH) Total per unit cost Royale Majestic $610 $400 120 100 246 205 $976 $705 In 2020, Schultz manufactured 25,000 units of the Royale and 10,000 units of the Majestic. The overhead rate of $41 per direct labor hour was determined by dividing total estimated manufacturing overhead of $8,187,500 by the total direct labor hours (200,000) for the two models. Under traditional costing, the gross profit on the models was Royale $554 ($1,530 - $976) and Majestic $565 ($1,270 - $705). 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 Schultz'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, 2020. Activity Cost Pools Estimated Overhead Estimated Use of Cost Drivers Activity- Based Overhead Rate Cost Drivers Number of Purchasing orders $1,286,500 41,500 $31/order 961,200 17,800 $54/setup Machine Number of setups setups Machine Machining hours Quality Number of control inspections 5,185,800 120,600 $43/hour 754,000 29,000 $26/inspection The cost drivers used for each product were: Cost Drivers Purchase orders Machine setups Machine hours Inspections Royale Majestic Total 18,000 23,500 41,500 5,000 12,800 17,800 75,000 45,600 120,600 11,000 18,000 29,000 Assign the total 2020 manufacturing overhead costs to the two products using activity-based costing (ABC) and determine the overhead cost per unit. (Round cost per unit to 2 decimal places, e.g. 12.25.) Royale Majestic Total assigned costs Cost per unit Calculate cost per unit of each model using ABC costing. (Round answers to 2 decimal places, e.g. 12.25.) Royale Majestic Cost per units $ Calculate gross profit of each model using ABC costing. (Round answers to 2 decimal places, e.g. 12.25.) Royale Majestic Gross profits Click if you would like to Show Work for this question: Open Show Work