Direct materials usage, unit costs, and gross margins (continuation of the previous question). Perlpet Company, bottle, and distributes mineral water from the companys natural springs in Shimla. Pearlpet markets two products: 12-ounce disposable plastic bottles and 4-gallon reusable plastic containers. The 4-gallon containers are sterilized and put back into service at the cost of Rs. 3 per container. Springwater is extracted at a direct labor cost of 10 paise per 8 ounces (there are 128 ounces in a gallon). Manufacturing overhead is allocated at the rate of Rs. 1.5 per unit. (Note: A unit can be a 12-ounce bottle or a 4-gallon container). In 2012, the production budget calls for the production of 2,250,000 twelve-ounce units and 650,000 four-gallon units. Required: 1. Assume four gallon containers are fully depreciated so that the only cost incurred is that of sterilization. Beginning and ending inventories for 4-gallon containers are zero. There are 250,000 empty 12-ounce bottles in beginning inventory on January 1.2013. the vice president of operations would like to end 2013 with 150,000 empty 12-ounce bottles in inventory. Accounting for sterilization as the only cost of the 4-gallon containers prepares a direct materials usage budget (relating to both bottles and containers) in both units and rupees. 2. The cost of direct manufacturing labour is captured through the extraction cost, as detailed above. Based on the data given, prepare a direct manufacturing labor budget for 2013. 3. Calculate the manufacturing cost per unit for each product. 4. 4. Assuming average selling prices as in the previous question, what is the expected average gross margin per unit for each product? 5. Consider Pearlpets choice of a cost allocation base for manufacturing overhead. Can you suggest alternative cost allocation bases?