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Crane 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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Crane 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 selts this in 600,0005 -liter jugs. Crane 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 proftable 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 Crane, is skeptical about this idea. He points out that for many decades the company produced only the CoolDay line and that it was always quite profitable. It wasnit until the company started producing the more complicated LiteMist wine that the profitability of CoolDay deelined. 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 bottled in 1-1.iter bottles, it requires considerably more time and effort, both to bottle and to label and box than does CoolDay. The company must bottle and handie 5 times as many bottles of LiteMist to sell the same quantity as CoolDay. CoolDay requires 1 month of aging Lite Mist requires 1 year. CoolDay requires cleaning and inspection of equigment every 10,000 liters: LiteMist requires such maintenance every 600 liters. Jack has asked the accounting department to prepare an analysis of the cost per liter using the traditional costing approach and using activity-based costing. The following information was collected Answer each of the following questions. Prepare a schedule assigning each activity's overhead cost pool to each product, based on the use of cost drivers. Include a computation of overhead cost per liter. (Round overhead rate, cost per liter to 3 decimal places, e.-. 12.250 and cost assigned to 0 decimal places, e.g. 12,250.) $ $ 5 5 $ 5

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