Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Bright Day Company produces two beverages, Hi-Voltage and EasySlim. Data about these products follow. Hi-Voltage EasySlim Production volume 10,000 bottles 240,000 bottles Liquid materials 800
Bright Day Company produces two beverages, Hi-Voltage and EasySlim. Data about these products follow.
Hi-Voltage | EasySlim | |||
Production volume | 10,000 | bottles | 240,000 | bottles |
Liquid materials | 800 | gallons | 31,000 | gallons |
Dry materials | 720 | pounds | 8,000 | pounds |
Bottles | 10,000 | bottles | 240,000 | bottles |
Labels | 3 | labels per bottle | 2 | label(s) per bottle |
Machine setups | 1,000 | setups | 550 | setups |
Machine hours | 130 | MH | 4,200 | MH |
Additional data from its two production departments follow.
Department | Driver | Cost | ||
Mixing department | ||||
Liquid materials | Gallons | $ | 1,908 | |
Dry materials | Pounds | 3,924 | ||
Utilities | Machine hours | 2,165 | ||
Bottling department | ||||
Bottles | Units | $ | 75,000 | |
Labeling | Labels per bottle | 20,400 | ||
Machine setup | Setups | 46,500 | ||
Required: 1 & 2. Determine the cost of each product line using ABC. What is the cost per bottle for Hi-Voltage and EasySlim? 3. If Hi-Voltage sells for $7.25 per bottle, how much profit does the company earn per bottle of Hi-Voltage that it sells? 4. What is the minimum price that the company should set per bottle of EasySlim?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started