Bichette Soda Company operates many bottling plants around the globe. At its Mississauga plant, where nine different brands are bottled, the following costs were incurred in the current year to produce 15,000,000 cans of soft drink:

1. Development costs of adding the new product "Pop Plus" amounted to $614,000.
2. Material handling costs of inspecting and handling concentrate, bottles, packages, and so forth amounted to $433,500. These costs are allocated to each production run.
3. Incoming materials purchase costs that can be directly traced to individual products being canned and packaged. These costs are purely variable with output level and amounted to $2,213,000.
4. Executive salaries and other central administration overhead amounted to $423,000.
5. Plant overhead including costs related to: supervision, safety, energy and plant insurance amounted to $623,000.
6. The cost of cleaning and calibrating equipment for each production run amounted to $171,500.

Required

1. Classify each of the preceding costs as output unit-level, batch-level, product-sustaining, or facility-sustaining.
2. Compute the cost per unit for the total manufacturing cost.

Question 1.2 (Total: 37 marks)

Alejandro Kirk Manufacturing produces two types of entry doors: Deluxe and Standard. The assignment basis for support costs has been direct labour dollars. For 2021, Alejandro Kirk the following data for the two products:

	Deluxe	Standard
Sales units	50,000	400,000
Sales price per unit	$650.00	$475.00
Direct material and labour costs per unit	$180.00	$130.00
Manufacturing support costs per unit	$80.00	$120.00

Last year, Alejandro Kirk Manufacturing purchased an expensive robotics system to allow for more decorative door products in the deluxe product line. The CFO suggested that an ABC analysis could be valuable to help evaluate a product mix and promotion strategy for the next sales campaign. She obtained the following ABC information:

Activity	Cost Driver	Cost	Total	Deluxe	Standard
Setups	# of setups	$500,000	500	400	100
Machine related	# of machine hours	$4,000,000	600,000	300,000	300,000
Packing	# of shipments	$5,000,000	250,000	50,000	200,000

Required

1. Using the current traditional (simple) costing system, determine the estimated:
   1. total cost of manufacturing one unit for each type of door
   2. profit per unit for each type of door
2. Using the activity-based costing data presented above,
   1. compute the cost driver rate for each overhead activity
   2. compute the revised manufacturing overhead cost per unit for each type of entry door
   3. compute the revised total cost to manufacture one unit of each type of entry door

Question 1.3 (Total: 15 marks)

Springer Energy Inc. produces food products for people active in sports. The following budgeted volume and costs has been provided for one of their post-workout beverages:

Budgeted production	65,000 units
Selling price	$4.00 per unit
Direct material costs	$1.30 per unit
Direct labour costs	$0.20 per unit
Fixed manufacturing costs	$19,500
Variable manufacturing costs	$0.25 per unit
Variable administrative costs	$0.01 per unit
Fixed administrative costs	$3,900

Required

What is the inventoriable cost per drink under each of the following methods?

1. 
   
2. absorption costing
3. variable costing
4. throughput costing

Question 1.4 (Total: 21 marks)

Gurriel Corporation manufactures and sells laptop computers and uses standard costing. For the month of October there was no beginning inventory, there were 1,500 units produced and 1,250 units sold. The manufacturing variable cost per unit is $770 and the operating cost per unit was $625. The fixed manufacturing cost is $450,000 and the fixed operating cost is $75,000. The selling price per unit is $1,850.

Required

1. Prepare the income statement for Gurriel Corporation for October under variable costing.

2.