Question
Bright Day Company produces two beverages, Hi-Voltage and EasySlim. Data about these products follow. Hi-Voltage EasySlim Production volume 9,500 bottles 180,000 bottles Liquid materials 1,400
Bright Day Company produces two beverages, Hi-Voltage and EasySlim. Data about these products follow. Hi-Voltage EasySlim Production volume 9,500 bottles 180,000 bottles Liquid materials 1,400 gallons 23,000 gallons Dry materials 1,120 pounds 16,000 pounds Bottles 9,500 bottles 180,000 bottles Labels 4 labels per bottle 3 label(s) per bottle Machine setups 1,000 setups 450 setups Machine hours 190 MH 3,450 MH Additional data from its two production departments follow. Department Driver Cost Mixing department Liquid materials Gallons $ 1,220 Dry materials Pounds 8,560 Utilities Machine hours 1,092 Bottling department Bottles Units $ 113,700 Labeling Labels per bottle 28,900 Machine setup Setups 43,500 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 $6.65 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?
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