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Pinter Company had the following environmental activities and product information: 1. Environmental activity costs Activity Design products (to reduce pollution) Test for contamination Treat
Pinter Company had the following environmental activities and product information: 1. Environmental activity costs Activity Design products (to reduce pollution) Test for contamination Treat toxic waste Operate pollution control equipment Costs $ 85,500 152,000 475,000 380,000 2. Driver data Solvent X Solvent Y Design hours 1,900 3,800 Testing hours 3,400 11,800 Pounds of waste 400 18,600 Machine hours 1,900 74,100 3. Other production data Solvent X Solvent Y Nonenvironmental production costs $3,306,000 $5,092,000 Units produced 380,000 380,000 Required: 1. Calculate the activity rates that will be used to assign environmental costs to products. Design products Testing Treating waste Operating equipment per design hour per test hour per pound of waste per machine hour 2. Determine the unit environmental and unit costs of each product using ABC. If required, round your answers to the nearest cent. Activities Solvent X Solvent Y Unit environmental cost Unit cost 3. What if the design costs increased to $175,500 and the cost of toxic waste decreased to $237,500? Assume that Solvent Y uses 7,600 out of 15,200 design hours. Also assume that waste is cut by 50 percent and that Solvent Y is responsible for 4,512.5 of 4,750 pounds of toxic waste. What is the new environmental cost for Solvent Y? If required, round your intermediate calculations and answer to the nearest cent. per unit
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