Benton Corporation produces two grades of non$-$alcoholic wine from grapes that it buys from California growers. It produces and sells

roughly $3,000,000$ liters per year of a low$-$cost$,$ high$-$volume product called CoolDay. It sells this in $600,0005-$liter jugs. Benton also

produces and sells roughly $300,000$ liters per year of a low$-$volume, high$-$cost product called LiteMist. LiteMist is sold in $1-$liter bottles.

Based on recent data, the CoolDay product has not been as profitable as LiteMist. Management is considering dropping the

inexpensive CoolDay line so it can focus more attention on the LiteMist product. The LiteMist product already demands considerably

more attention than the CoolDay line.

Jack Eller, president and founder of Benton, is skeptical about this idea. He points out that for many decades the company produced

only the CoolDay line and that it was always quite profitable. It wasn't until the company started producing the more complicated

LiteMist wine that the profitability of CoolDay declined. Prior to the introduction of LiteMist, the company had basic equipment,

simple growing and production procedures, and virtually no need for quality control. Because LiteMist is bottled in $1-$liter bottles, it

requires considerably more time and effort, both to bottle and to label and box than does CoolDay. The company must bottle and

handle $5$ times as many bottles of LiteMist to sell the same quantity as CoolDay. CoolDay requires $1$ month of aging; LiteMist requires

$1$ year. CoolDay requires cleaning and inspection of equipment every $10,000$ liters; LiteMist requires such maintenance every $600$

liters.

Jack has asked the accounting department to prepare an analysis of the cost per liter using the traditional costing approach and using

activity$-$based costing. The following information was collected. $($a$)$

Your answer is incorrect.

Under traditional product costing using direct labor hours, compute the total manufacturing cost per liter of both products.

$($Round answers to $3$ decimal places, e$.$g$.12\mathrm{.}250.)$

Attempts: $1$ of $3$ used