E v > R GOB education.wiley.com C + 88 C Ebooks - Cengage eReader Homework- Chapter 4 W NWP Assessment Player UI Application Course Hero - Homework- Chapter 4 Question 8 of 8 0.47 /5 : Current Attempt in Progress Benton 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 sells this in 600,000 5-liter jugs. Benton 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 profitable 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 Benton, 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 wasn't until the company started producing the more complicated LiteMist d. 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-liter bottles, it requires considerably more time and effort, both to bottle and to label and box than does CoolDay. The company must bottle and handle 5 times as many bottles of LiteMist to sell the same quantity as CoolDay. CoolDay requires 1 month of aging; LiteMist requires 1 year. CoolDay requires cleaning and inspection of equipment 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. CoolDay LiteMist Direct materials per liter $0.40 $1.20 Direct labor cost per liter $0.50 $0.90 Direct labor hours per liter 0.05 0.09 Total direct labor hours 150,000 27,000 Estimated Use of Cost Drivers per Product stimated Estimated Use of Activity Cost Pools Cost Drivers Overhead Cost Drivers CoolDay LiteMist Grape processing Cart of grapes $147,127 6,600 6,000 600 Aging Total months 693,000 6,600,000 3,000,000 3,600,000 Bottling and corking Number of bottles 311,400 900,000 600,000 300,000 Labeling and boxing Number of bottles 207,000 900,000 600,000 300,000 Maintain and inspect Number of 243,200 800 350 450 equipment inspections $1,601,727 Answer each of the following questions. (a) * Your answer is incorrect.E v > R GOE education.wiley.com C + 88 C Ebooks - Cengage eReader Homework- Chapter 4 W NWP Assessment Player UI Application Course Hero - Homework- Chapter 4 Question 8 of 8 R GOE education.wiley.com C + 88 C Ebooks - Cengage eReader Homework- Chapter 4 W NWP Assessment Player UI Application Course Hero - Homework- Chapter 4 Question 8 of 8 0.47 /5 : (c) 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.g. 12.250 and cost assigned to 0 decimal places, e.g. 12,250.) CoolDa Estimated Use of Activity-Based Activity Cost Pool Cost Drivers Overhead Rates Grape processing Aging Bottling and corking Labeling and boxing Maintain and inspect equipment Overhead costs assigned Liters produced Overhead cost per liter eTextbook and Media Save for Later Attempts: unlimited Submit Answer (d) * Your answer is incorrect. Compute the total manufact al manufacturing cost per liter for both products under ABC. (Round overhead cost per liter to 3 decimal places, e.g. 1.225.) CoolDay LiteMist Manufacturing cost per liter $ 1.196 4.393 eTextbook and Media Save for Later Attempts: unlimited Submit AnswerE v > R GOE education.wiley.com C + 88 C Ebooks - Cengage eReader Homework- Chapter 4 W NWP Assessment Player UI Application Course Hero - Homework- Chapter 4 Question 8 of 8 0.47 /5 : (c) 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.g. 12.250 and cost assigned to O decimal places, e.g. 12,250.) ListMist Estimated Use of Activity-Based Cost Assigned Cost Drivers Overhead Rates eTextbook and Media Save for Later Attempts: unlimited Submit Answer (d) * Your answer is incorrect. Compute the total manufact al manufacturing cost per liter for both products under ABC. (Round overhead cost per liter to 3 decimal places, e.g. 1.225.) CoolDay LiteMist Manufacturing cost per liter $ 1.196 4.393 eTextbook and Media Save for Later Attempts: unlimited Submit AnswerE v > R GOE education.wiley.com C + 88 C Ebooks - Cengage eReader Homework- Chapter 4 W NWP Assessment Player UI Application Course Hero - Homework- Chapter 4 Question 8 of 8 0.47 /5 : (c) 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.g. 12.250 and cost assigned to 0 decimal places, e.g. 12,250.) ListMist Estimated Use of Activity-Based Cost Drivers Overhead Rates Cost Assigned eTextbook and Media Save for Later Attempts: unlimited Submit Answer (d) * Your answer is incorrect. Compute the total manufact al manufacturing cost per liter for both products under ABC. (Round overhead cost per liter to 3 decimal places, e.g. 1.225.) CoolDay LiteMist Manufacturing cost per liter $ 1.196 4.393 eTextbook and Media Save for Later Attempts: unlimited Submit Answerv > R GO education.wiley.com C + 88 C Ebooks - Cengage eReader Homework- Chapter 4 W NWP Assessment Player UI Application Dashboard - Homework- Chapter 4 Question 5 of 8 R GO education.wiley.com C + 88 C Ebooks - Cengage eReader Homework- Chapter 4 W NWP Assessment Player UI Application Dashboard - Homework- Chapter 4 Question 5 of 8 1.33/2 : Product 137Y 104000 Product 2495 74000 eTextbook and Media Attempts: unlimited (b Your answer is correct. For each product line, compute operating income using the activity-based costing system. Product 540X 155400 Product 137Y 134000 Product 2495 33600 eTextbook and Media Attempts: unlimited (c) * Your answer is incorrect. Using the following formula, compute the percentage difference in operating income for each of the product lines of Ayala: [Operating Income (ABC) - Operating Income (traditional cost)] : Operating Income (traditional cost). (Round answers to 2 decimal places, e.g. 12.25%. Enter negative answers using either a negative sign preceding the number e.g. -45.25% or parentheses e.g. (45.25)%.) Product 540X 6.69 % Product 137Y 0.29 % Product 2495 -0.55 % eTextbook and Media Save for Later Attempts: unlimited Submit