M6-17. Two-Stage ABC for Manufacturing

Assume Sherwin-Williams Company, a large paint manufacturer, has determined the following activity cost pools and cost driver levels for the latest period:

Activity Cost Pool	Activity Cost	Activity Cost Driver
Machine setup	$975,000	2,500 setup hours
Material handling	$830,000	5,000 material moves
Machine operation	$180,000	20,000 machine hours

The following data are for the production of single batches of two products, Mirlite and Subdue:

	Mirlite	Subdue
Gallons produced	50,000	30,000
Direct labor hours	400	250
Machine hours	800	250
Direct labor cost	$10,000	$7,500
Direct materials cost	$350,000	$150,000
Setup hours	15	12
Material moves	60	35

Required

Determine the batch and unit costs per gallon of Mirlite and Subdue using ABC.

Please, show all calculations.