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Blossom 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

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Blossom 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 600,000 5-liter jugs, gilossom 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 probitable 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 Blossom, is skeptical about this idea. He points out that for many decades the company prodoced only the CoolDay line and that it was always quitejorofitable. It wasn't until the company started producing the more complicated UteMist 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 bottied in 1 -Eter bottles, it requires considerably more time and effort, both to bottle and to label and box than does CoolDax. The compary must bottle and handle 5 times as mamy bottles of LiteMist to sell the same quantity as CoolDay. CoolDay requires 1 month of aging: LheMist requires 1 year. CoolDay requires cleaning and inspection of equipment every 10.000 liters: Lite Mist requires suchmaintenance every 600 liters Jack has asked the accounting department to prepare an analysis of the cost per liker using the traditional costing aporoach and using activity-based costing. The followine information was collected. Answer cach of the following questions Compute the total manufacturing cost per liter for both products under ABC. (Round overhead cost per liter to 3 decimal places, e.g. 1.225.)

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