Determine the cost of each product line using ABC. What is the cost per bottle f

Question

Determine the cost of each product line using ABC. What is the cost per bottle for Hi-Voltage and EasySlim? (Do not round your intermediate calculations. Round "Activity Rate" answers to 2 decimal places.)

Assume if Hi-Voltage sells for $6.55 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.)

A.$0.52 per bottle

B.$0.72 per bottle

c.$0.87 per bottle

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

Explanation / Answer

1 & 2

Assume if Hi-Voltage sells for $6.55 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.)

cost per unit = 43488/10000 = 4.35

What is the minimum price that the company should set per bottle of EasySlim?

Minimum price that the company should set per bottle of EasySlim = 109899/240000

Minimum price that the company should set per bottle of EasySlim = 0.46

Hi-Voltage Hi-Voltage EasySlim EasySlim Activity Expcted costs Expected activity expected activity activity rate activity rate activ. driver incurred overhead assigend activ. driver incurred overhead assigend Mixing department Mixing depa Mixing depa Mixing depa Mixing depa Mixing depa Mixing depa Mixing depa Mixing depa Mixing depa Liquid materials                  954 31800 Gallons                 0.03                 0.03 800               24.00 31000              930.00 Dry materials               6,488 16220 Pounds                 0.40                 0.40 1220              488.00 15000           6,000.00 Utilities               3,045 4350 Machine hours                 0.70                 0.70 150              105.00 4200           2,940.00 Bottling department Bottling depa Bottling depa Bottling depa Bottling depa Bottling depa Bottling depa Bottling depa Bottling depa Bottling depa Bottles 75000 250000 bottles                 0.30                 0.30 10000           3,000.00 240000         72,000.00 Labeling 30400 7 Labels           4,342.86           4,342.86 4         17,371.00 3         13,029.00 Machine setup 37500 1500 Setups               25.00               25.00 900         22,500.00 600         15,000.00 Total Overhead assigned         43,488.00       109,899.00

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