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Bright Day Company produces two beverages, Hi-Voltage and EasySlim. Data about these products follow. Hi-Voltage EasySlim Production volume 10,500 bottles 230,000 bottles Liquid materials 1,000
Bright Day Company produces two beverages, Hi-Voltage and EasySlim. Data about these products follow.
Hi-Voltage | EasySlim | |||
Production volume | 10,500 | bottles | 230,000 | bottles |
Liquid materials | 1,000 | gallons | 29,000 | gallons |
Dry materials | 720 | pounds | 13,000 | pounds |
Bottles | 10,500 | bottles | 230,000 | bottles |
Labels | 4 | labels per bottle | 2 | label(s) per bottle |
Machine setups | 800 | setups | 600 | setups |
Machine hours | 200 | MH | 3,900 | MH |
Additional data from its two production departments follow.
Department | Driver | Cost | ||
Mixing department | ||||
Liquid materials | Gallons | $ | 1,800 | |
Dry materials | Pounds | 8,918 | ||
Utilities | Machine hours | 1,640 | ||
Bottling department | ||||
Bottles | Units | $ | 96,200 | |
Labeling | Labels per bottle | 25,100 | ||
Machine setup | Setups | 35,000 | ||
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 $6.25 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?
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