Question

Problem 5.37A a-b Jacobson Electronics manufactures two HD television models: the Royale, which sells for $1,400, and a new model, the Majestic, which sells for $1,100. The production costs calculated per unit under traditional costing for each model in 2020 were as follows: Royale Majestic 1600 Traditional costing Direct materials Direct labour ($20 per hour) Manufacturing overhead ($35 per direct labour hour) Total per unit cost 100 140 175 $875 $540 In 2020, Jacobson manufactured 20,000 units of the Royale and 10,000 units of the Majestic. The overhead rate of $35 per direct labour hour was determined by dividing total estimated manufacturing overhead of $4.9 m on by the total direct labour hours (140,000) for the two models Under traditional costing, the gross profit on the models was $25 for the Royale or (51,400 - $875), and $500 for the Majestic or (51,100 - $540). Because of herence, management is considering phasing out the Royale model and increasing the production of the Majestic model Before finalizing its decision, management asks Jacobson'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 Purchasing Machine set-ups Machining Quality control Cost Drivers Number of orders Number of set-ups Machine hours Number of inspections Estimated Estimated Use Activity-Based Overhead of Cost Drivers Overhead Rate $750,000 25,000 $30 per order 600,000 20,000 30 per set-up 3,100,000 100,000 31 per hour 450,000 5,000 90 per inspection The cost drivers used for each product were as follows: Cost Drivers Royale Majestic Total Purchase orders 10,400 14,600 25,000 Machine set-ups 11,200 8 .800 20,000 Machine hours 38,400 61,600 100,000 Inspections 2,000 3,000 5,000 Assign the total 2020 manufacturing overhead costs to the two products using activity-based costing (ABC). (Round answers to 2 decimal placese.. 15.25.) Royale Majestic Per unit overhead costs