Barbara Karloff Inc. recently set up as a microbrewery to manufacture a variety of beers, ales and

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Barbara Karloff Inc. recently set up as a microbrewery to manufacture a variety of beers, ales and stouts to customer specifications. The standard sizes per batch are as follows: stout, 5,000 gallons; ale, 8,000 gallons; and beer, 10,000 gallons. A beer batch takes six days to process, ale ten days and stout 14 days, the difference primarily attributable to the number of steps in the brewing process and the amount of time needed to mature the brew to the intended flavor specifications. By tradition, a new batch is started at 7 a.m., the start of a work day. It costs $1,800 in labor and variable overhead to set up each batch. The brewery's monthly fixed overhead is $220,000, which is allocated to products based on gallons. Other costing data appears below.