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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
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 | 620,000 | 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 | 60,000 | 10,000 |
Direct labor hours | 500 | 350 |
Machine hours | 900 | 250 |
Direct labor cost | $10,000 | $7,500 |
Direct materials cost | $350,000 | $150,000 |
Setup hours | 15 | 11 |
Material moves | 70 | 35 |
Determine the batch and unit costs per gallon of Mirlite and Subdue using ABC. (Round your answers to the nearest cent.)
a) mirlite________$per gallon
b) subdue ___________ $per gallon
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