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Question #1:

Evaluate Elliot-Jones' decision to focus on the 55" 4K Ultra HD television and phase out the 65-inch LED television.

Question #2:

In what other ways could Elliot-Jones' use the activity-based cost information available?

Elliot-Jones manufactures two large-screen television models. The 65-inch flat-panel LED model has been in production since 2012 and sells for $900. The company introduced a 55 -inch 4K ultra HD in 2016; it sells for $1,200. The company's income statement for the current year follows. Based on these results, management has decided to concentrate the company's marketing efforts on the 4K ultra HD model and begin to phase out the LED model. The unit costs for the two television models are as follows: Mark Renn, Elliot-Jones' controller, just attended a seminar on activity-based costing and believes the company should implement such a system. He has gathered the following annual information to explore the possibility. \begin{tabular}{lcc} ABC Cost & 65" LED & 55"4KUltraHD \\ \hline OH per unit & $153.95 & $368.28 \\ Total cost per unit & 523.95 & 929.43 \end{tabular} Elliot-Jones manufactures two large-screen television models. The 65-inch flat-panel LED model has been in production since 2012 and sells for $900. The company introduced a 55 -inch 4K ultra HD in 2016; it sells for $1,200. The company's income statement for the current year follows. Based on these results, management has decided to concentrate the company's marketing efforts on the 4K ultra HD model and begin to phase out the LED model. The unit costs for the two television models are as follows: Mark Renn, Elliot-Jones' controller, just attended a seminar on activity-based costing and believes the company should implement such a system. He has gathered the following annual information to explore the possibility. \begin{tabular}{lcc} ABC Cost & 65" LED & 55"4KUltraHD \\ \hline OH per unit & $153.95 & $368.28 \\ Total cost per unit & 523.95 & 929.43 \end{tabular}

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