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In: Accounting

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

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

Hi-Voltage EasySlim
Production volume 10,000 bottles 240,000 bottles
Liquid materials 800 gallons 31,000 gallons
Dry materials 720 pounds 8,000 pounds
Bottles 10,000 bottles 240,000 bottles
Labels 3 labels per bottle 2 label(s) per bottle
Machine setups 1,000 setups 550 setups
Machine hours 130 MH 4,200 MH


Additional data from its two production departments follow.

Department Driver Cost
Mixing department
Liquid materials Gallons $ 1,908
Dry materials Pounds 3,924
Utilities Machine hours 2,165
Bottling department
Bottles Units $ 75,000
Labeling Labels per bottle 20,400
Machine setup Setups 46,500


Required:
1 & 2. Determine the cost of each product line using ABC. What is the cost per bottle for Hi-Voltage and EasySlim?
3. If Hi-Voltage sells for $7.25 per bottle, how much profit does the company earn per bottle of Hi-Voltage that it sells?
4. What is the minimum price that the company should set per bottle of EasySlim?

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Expert Solution

ekkarill92 answered 1 year ago
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