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Problem 17-4A Evaluating product line costs and prices using ABC LO P3 Bright Day Company produces two beverages, Hi-Voltage and EasySlim. Data about these products

Problem 17-4A Evaluating product line costs and prices using ABC LO P3

Bright Day Company produces two beverages, Hi-Voltage and EasySlim. Data about these products follow.

Hi-Voltage EasySlim
Production volume 10,500 bottles 240,000 bottles
Liquid materials 800 gallons 25,000 gallons
Dry materials 1,020 pounds 15,000 pounds
Bottles 10,500 bottles 240,000 bottles
Labels 3 labels per bottle 3 label(s) per bottle
Machine setups 900 setups 900 setups
Machine hours 190 MH 3,900 MH

Additional data from its two production departments follow.

Department Driver Cost
Mixing department
Liquid materials Gallons $ 2,322
Dry materials Pounds 7,209
Utilities Machine hours 2,454
Bottling department
Bottles Units $ 100,200
Labeling Labels per bottle 22,545
Machine setup Setups 63,000

Required: 1 & 2. Determine the cost of each product line using ABC. What is the cost per bottle for Hi-Voltage and EasySlim? 3. If Hi-Voltage sells for $6.25 per bottle, how much profit does the company earn per bottle of Hi-Voltage that it sells? 4. What is the minimum price that the company should set per bottle of EasySlim?

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Req 1 to 2 Req 3 Req 4 Determine the cost of each product line using ABC. What is the cost per bottle for Hi-Voltage and Easy Slim? (Do not round your intermediate calculations. Round "Activity Rate" and "Average cost per bottle" a to 2 decimal places.) Hi-Voltage Easy Slim Activity driver Overhead incurred assigned Activity Expected Costs Overhead Expected Activity Activity Rate Activity driver incurred assigned $ o Gallons Mixing department Liquid materials Dry materials Utilities 2,322 7,209 2,454 0 Pounds Machine hours $ 100,200 Bottles Bottling department Bottles Labeling Machine setup 22,545 Labels 63,000 Setups Reg 1 to 2 Req3 > Complete this question by entering your answers in the tabs below. Req 1 to 2 Req3 Reg 4 If Hi-Voltage sells for $6.25 per bottle, how much profit does the company earn per bottle of Hi-Voltage that it sells? (Do not round intermediate calculations and round your final answers to 2 decimal places.) Hi-Voltage Price per unit Cost per unit Profit (loss) per unit Complete this question by entering your answers in the tabs below. Req 1 to 2 Req 3 Req 4 What is the minimum price that the company should set per bottle of Easy Slim? What is the minimum price that the company should set per bottle of Easy Slim?

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