Several years after reengineering its production process, Burke Corporation hired a new controller, Georgia Taylor. She developed an ABC system very similar to the one used by Burke's chief rival. Part of the reason Taylor developed the ABC system was because Burke'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, Burke had used a plantwide overhead rate based on direct labor hours that was developed years ago.

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Manufacturing Overhead Costs per Unit: ABC costs ..... $ Plantwide overhead rate ..... $ Standard 199.50 $ 237.60 $ Sales price per wheel $ Direct materials per wheel .... $ Direct labor per wheel . . . . . . . . $ The following data are budgeted for the company's Standard and Deluxe models for next year: Standard Deluxe 470.00 $ 34.50 $ 45.70 $ 372.50 334.40 Deluxe 640.00 47.50 50.00 Manufacturing Overhead Costs per Unit: ABC costs ..... $ Plantwide overhead rate ..... $ Standard 199.50 $ 237.60 $ Sales price per wheel $ Direct materials per wheel .... $ Direct labor per wheel . . . . . . . . $ The following data are budgeted for the company's Standard and Deluxe models for next year: Standard Deluxe 470.00 $ 34.50 $ 45.70 $ 372.50 334.40 Deluxe 640.00 47.50 50.00

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ANSWER 1 Gross profit per wheel using ABC unit cost data For the Standard model Sales price per whee... View the full answer