View Policies Current Attempt in Progress Benton Corporation produces two grades of non alcoholic wine from grapes that it buys from California growers. It produces and sells roughly 3,000,000 liters per year of a low cost, high-volume product called CoolDay it sells this in 600,000 5 ter jigs Benton also produces and sells roughly 300,000 liters per year of a low volume high-cost product called LiteMist LibeMist is sold in 1-ter bottles Based on recent data, the CoolDay product has not been as profitable as LiteMist Management is considering dropping the inexpensive CoolDay line so it can focus more attention on the LiteMist product. The LiteMist product already demands considerably more attention than the CoolDay line Jack Eller, president and founder of Benton is skeptical about this idea. He points out that for many decades the company produced only the CoolDay line and that it was always quite profitable. It wasn't until the company started producing the more complicated LiteMist wine that the profitability of CoolDay declined. Prior to the introduction of LiteMist, the company had basic equipment. simple growing and production procedures, and virtually no need for quality control. Because LiteMist is bottled in 1-ter bottles, it requires considerably more time and effort, both to bottle and to label and box than does CoolDay The company must bottle and handle 5 times as many bottles of LiteMist to sell the same quantity as CoolDay CoolDay requires 1 month of aging LiteMist requires 1 year. CoolDay requires cleaning and inspection of equipment every 10,000 Reers LiteMist requires such maintenance every 600 liters Jack has asked the accounting department to prepare an analysis of the cost per liter using the traditional costing approach and using activity-based costing. The following information was collected CoolDay LiteMist Direct materials per liter $0.40 $1.20 Direct labor cost per liter 50.50 50.90 Direct labor hours per liter 0.07 0.07 Total direct labor hours 210.000 21,000 Estimated Use of Cost Drivers per Product Estimated Use Activity Cost Pools Cost Drivers Estimated Overhead Cost Drivers CoolDay LiteMist Grape processing Cart of grapes $146.909 6.600 6,000 600 Aging Total months 745.800 6.600,000 3,000,000 3,600,000 Bottling and corking Number of bottles 288.000 900,000 600,000 300.000 Labeling and boxing Number of bottles 200700 900,000 600,000 300,000 Maintain and inspect Number of 241600 800 350 450 equipment inspections Answer each of the following questions. (a) $1623.009 Under traditional product costing using direct labor hours. compute the total manufacturing cost per liter of both products (Round answers to 3 decimal places, eg 12.250) Manufacturing cost per liter Save for Later CoolDay LiteMist Attempts: 0 of Jused Submit Answer Your answer has been saved. See score details after the due date. Under ABC, prepare a schedule showing the computation of the activity-based overhead rates (per cost driver). (Round overhead rates to 3 decimal places, eg 12.250) Activity Cost Pools Estimated Overhead Estimated Use of Cost Drivers Activity-Based Overhead Rates Grape processing 146804 6,600 $ 22.2430000 per cart Agint 673200 6,600,000 $ 0102 per month Bottling and 287,300 corking 500.000 $ 0319 per bottle Labeling and 198,900 boxing 900,000 $ 0721 per bottle Maintain and inspect 242,400 800 equipment 300 per inspection 1.548404 Attempts: 1 of 1 used 4C Prepare a schedule angning och activity's overhead cust pool to each product, hased on the use of cost drivers Include a computation of overhead cost per Mer Round overhead rote, cost per ter to 3 decimet pieces, ea 12.250 and c of planes 12.250) CoolDay Activity Cost Pool Estimated Use of Cost Drivers Activity Bined Overhead Rates Cost Grape processing 6000 5000006 $ 0302 0000 400000 $ FLAUKS 600.000 $ 022 130400 Maintain and inspect equipment 350 300 106050 Overhead costs assigned Liters produced 1,000,000 Overhead cost per liter 02030 (d) Liters produced Overhead cost per liter 000000 02998306 Attempts: 1 of 1 used Your answer has been saved. See score details after the due date Compute the total manufacturing cost per liter for both products under ABC. (Round overhead cost per liter to 3 decimal places, 1.225) CoolDay LiteMist Manufacturing cost per liter $ 118983606 S 436298606 Attempts: 1 of 1 used