Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

Bright Day Company produces two beverages, Hi-Voltage and EasySlim. Data about these products follow. Hi-Voltage EasySlim Production volume 12,500 bottles 200,000 bottles Liquid materials 1,800

Bright Day Company produces two beverages, Hi-Voltage and EasySlim. Data about these products follow.

Hi-Voltage EasySlim
Production volume 12,500 bottles 200,000 bottles
Liquid materials 1,800 gallons 25,000 gallons
Dry materials 820 pounds 8,000 pounds
Bottles 12,500 bottles 200,000 bottles
Labels 4 labels per bottle 2 label(s) per bottle
Machine setups 700 setups 600 setups
Machine hours 190 MH 4,200 MH

Additional data from its two production departments follow.

Department Driver Cost
Mixing department
Liquid materials Gallons $ 1,876
Dry materials Pounds 2,646
Utilities Machine hours 2,634
Bottling department
Bottles Units $ 63,750
Labeling Labels per bottle 13,500
Machine setup Setups 19,500

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 $6.55 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?

image text in transcribed

image text in transcribed

image text in transcribed

Complete this question by entering your answers in the tabs below. Req 1 to 2 Req3 Reg 4 Determine the cost of each product line using ABC. What is the cost per bottle for Hi-Voltage and Easy Slim? (Do not round your intermediate calculations. Round "Activity Rate" and "Average cost per bottle" answers to 2 decimal places.) Hi-Voltage Easy Slim Activity Overhead Activity driver Overhead Expected Costs Activity driver incurred Expected Activity Activity Rate assigned incurred assigned Mixing department Liquid materials Gallons Dry materials Pounds Utilities Machine hours Bottling department Bottles Bottles Labeling Labels Machine setup Setups Reg 1 to 2 Reg 3 Req 4 If Hi-Voltage sells for $6.55 per bottle, how much profit does the company earn per bottle of Hi-Voltage that it sells? (Do not round intermediate calculations and round your final answers to 2 decimal places.) Hi-Voltage Price per unit Cost per unit Profit (loss) per unit Req 1 to 2 Req3 Req 4 What is the minimum price that the company should set per bottle of Easy Slim? What is the minimum price that the company should set per bottle of Easy Slim?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Ray Garrison, Eric Noreen, Peter Brewer

16th edition

978-1259307416

Students also viewed these Accounting questions