Shultz Company had the following environmental activities and product information:

1. Environmental activity costs

2. Driver data

3. Other production data

Required:
1. Calculate the activity rates that will be used to assign environmental costs to products.
2. Determine the unit environmental and unit costs of each product using ABC.
3. What if the design costs increased to $540,000 and the cost of toxic waste decreased to $1,125,000? Assume that Cleanser Y uses 9,000 out of 18,000 design hours. Also assume that waste is cut by 50 percent and that Cleanser Y is responsible for 21,375 of 22,500 pounds of toxic waste. What is the new environmental cost for Cleanser Y?

Transcribed Image Text:

Activity Design products (to reduce pollution) Test for contamination Treat toxic waste Operate pollution control equipment Costs $ 405,000 720,000 2,250,000 1,800,000