1. Using activity-based costing, calculate the gross margin per unit of the Regal and Monarch models.
2. Explain briefly why these numbers differ from the gross margin per unit of the Regal and Monarch models
calculated using Applewood’s existing simple costing system.
3. Comment on Duval’s concerns about the accuracy and limitations of ABC.
4. How might Applewood find the ABC information helpful in managing its business?
5. What should Susan Benzo do in response to Duval’s comments?