View Policies Show Attempt History 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 s-liter juga. Benton also produces and sells roughly 300.000 liters per year of a low volume, high-cost product called Lite Mist. Lite Mist is sold in 1 liter bottles. Based on recent data, the CoolDay product has not been as profitable as Lite Mist. Management is considering dropping the inexpensive CoolDayline so it can focus more attention on the LiteMist product. The Lite Mist product already demands considerably more attention than the CoolDayline. 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 Lite Mist, the company had basic equipment. simple growing and production procedures, and virtually no need for quality control. Because LiteMistis bottled in 1-liter 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 times as many bottles of Lite Mist to sell the same quantity as CoolDay, CoolDay requires 1 month of aging: Lite Mist requires 1 year. CoolDay requires cleaning and inspection of equipment every 10.000 liters: 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 50.40 $1.20 $0.50 $0.90 Direct materials per liter Direct labor cost per liter Direct labor hours per liter Total direct labor hours 0,07 0.08 210.000 24,000 Estimated Use of Cost Drivers per Product 073.33 Question 1 of 3 ili VROUW CoolDay Lite Mist $0.40 $1.20 $0.50 $0.90 Direct materials per liter Direct labor cost per liter Direct labor hours per liter Total direct labor hours 0.07 0.08 210,000 24,000 Estimated Use of Cost Drivers per Product Estimated Use of Cost Drivers Activity Cost Pools Estimated Overhead Cost Drivers CoolDay Lite Mist Cart of grapes $146,678 6,600 6,000 600 Total months 673.200 6,600,000 3,000,000 3,600,000 Grape processing Aging Bottling and corking Labeling and boring Maintain and respect equipment 286.200 900,000 600,000 300,000 Number of bottles Number of bottles Number of inspections 233,100 900.000 600,000 300,000 242.400 800 350 450 $1.581.578 Answer each of the following questions (a) Answer cach of the following questions fa) Your answer is incorrect Under traditional product costing using direct bor hours.compute the total manufacturing cost per liter of both products Round answers to 3 decimal placeses. 122501 CoolDay Lite Mist Manufacturing cost per liter 3 $ eTextbook and Media Saver Attempts: 3 of 5 used Sur Am (6) The parts of this sonst be contender. This part will be able when you complete the part above The parts of the trust be conced in order that we w when you complete the post above
