Problem 17-4A Evaluating product line costs and prices using ABC LO P3

[The following information applies to the questions displayed below.] Bright Day Company produces two beverages, Hi-Voltage and EasySlim. Data about these products follow.

	Hi-Voltage		EasySlim
Production volume	11,000	bottles	270,000	bottles
Liquid materials	1,000	gallons	29,000	gallons
Dry materials	1,320	pounds	3,000	pounds
Bottles	11,000	bottles	270,000	bottles
Labels	4	labels per bottle	3	label(s) per bottle
Machine setups	700	setups	400	setups
Machine hours	200	MH	3,750	MH

Additional data from its two production departments follow.

Department	Driver	Cost
Mixing department
Liquid materials	Gallons	$	2,400
Dry materials	Pounds		1,296
Utilities	Machine hours		1,185
Bottling department
Bottles	Units	$	84,300
Labeling	Labels per bottle		34,160
Machine setup	Setups		27,500

Problem 17-4A Parts 1, 2 & 3

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 $7.65 per bottle, how much profit does the company earn per bottle of Hi-Voltage that it sells?

Req 1 to 2

Hi- Voltage EasySlim

Activity Expected Costs Expected Activity Activity Rate Activity driver incurred Overhead assigned Activity driver incurred Overhead assigned

Mixing department

Liquid materials $________ ____________Gallons __________ Per gallon ______________ _____________ $ ________________ $ _______

Dry materials

Utilities

Bottling department

Total overhead cost

Production volume (bottles)

Average cost per bottle

Req 3

If Hi-Voltage sells for $7.65 per bottle, how much profit does the company earn per bottle of Hi-Voltage that it sells? (Do not round intermediate calculations and round your final answers to 2 decimal places.)

Price per unit

Cost per Unit

Profit (loss) per unit

Bottles Labeling

Machine setup