Assume that direct materials cost for a 100-unit batch of BW-18 beeswax candle is $2,200 and that Nature Candle sells these candles at $46 each. Using both the present and first proposed costing methods, advise if the BW-18 price should be increased? Should it be dropped from the product line?

Exhibit 1: Calculation of Plantwide Labour and Overhead Hourly Rate for October

Labour	Dollars	Hours
Wick making	$40,873	2,527
Wax melting	28,760	2,138
Molding	143,899	7,678
Custom work	61,137	3,712
Packing	218,638	15,357
Total labour	493,307	31,412
Overhead	824,492
Total labour and overhead	1,317,799

Hourly Rate = $1,317,799/31,412 = $41.95 per hour (= $15.70 1abour + $26.25 overhead)

Exhibit 2: Proposed Departmental Labour and Overhead Hourly Rates

Department	Labour Rate per Hour	Overhead per Hour	Total Cost per Hour
Wick making	$20.10	$23.53	$43.63
Wax melting	18.50	22.61	41.11
Molding	19.75	46.89	66.64
Custom work	23.10	30.36	53.46
Packing	15.00	15.89	30.89

Exhibit 3: Direct Labour Hour Distribution for Three MCT’s Activities

	BW-18 Beeswax	Spare Candles	Work for
	Candles (per Batch	for Inventory	Other Divisions
Department	of 100)	(per Month)	(per Month)
Wick making	8 hours	122 hours	270 hours
Wax melting	5 hours	108 hours	216 hours
Molding	23 hours	446 hours	863 hours
Custom work	-	-	-
Packing	14 hours	-	-
Total	50 hours	676 hours	1,349 hours