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	$950,000	2,500 setup hours
Material handling	920,000	5,000 material moves
Machine operation	200,000	20,000 machine hours

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

	Mirlite	Subdue
Gallons produced	40,000	40,000
Direct labor hours	500	350
Machine hours	800	150
Direct labor cost	$10,000	$7,500
Direct materials cost	$350,000	$150,000
Setup hours	15	11
Material moves	60	35