In: Accounting
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 | $990,000 | 3,000 | setup hours |
Material handling | 840,000 | 6,000 | material moves |
Machine operation | 200,000 | 25,000 | machine hours |
The following data are for the production of single batches of two
products, Mirlite and Subdue:
Mirlite | Subdue | |
---|---|---|
Gallons produced | 30,000 | 20,000 |
Direct labor hours | 300 | 150 |
Machine hours | 650 | 200 |
Direct labor cost | $ 12,300 | $ 9,500 |
Direct materials cost | $240,000 | $ 110,000 |
Setup hours | 12 | 10 |
Material moves | 40 | 25 |
Determine the batch and unit costs per gallon of Mirlite and Subdue
using ABC. (Round your answers to the nearest cent.)