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i cant solve i need some help Oriole Corporation produces two grades of non-alcoholic wine from grapes that it buys from California growers. It produces
i cant solve i need some help
Oriole 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-literjugs. Oriole 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 profitabie 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 CoolDayline. Jack Eller, president and founder of Oriole, 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 declined. 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 equigment every 10,000 liters: LiteMist requires such maintenance every 600 liters. Jackhas asked the accounting department to prepare an analysis of the cost per liter using the tratitional costing approach and using activity-based costing. The following information was collected Answer each of the following questions (b) Under ABC, prepare a schedule showing the compotation of the activity-based overhend rates (per cost driver). (Round overhead rotes to 3 decimal places, e.g. 12.250.) Under ABC, prepare a schedule showing the computation of the activity-based overhead rates (per cost driver), (Round overhead rates to 3 decimal places, e.g. 12.250.) Step by Step Solution
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