Problem 17 4A Evaluating product line costs and prices using ABC LO P3 Bright Day Company produces two beverages, Hi Voltage and EasySlim Data about these products follow Hi Voltage EasySlim Production volume 11,500 bottles 270,000 bottles Liquid materials 1,400 gallons 35,000 gallons Dry materials 1,020 pounds 3,000 pounds Bottles 11,500 bottles 270,000 bottles Labels 4 labels per bottle 3 label(s) per bottle Machine setups 1,200 setups 700 setups Machine hours 200 MH 3,600 MH Additional data from its two production departments follow Department Driver Cost Mixing department Liquid materials Gallons $ 2,548 Dry materials Pounds 2,010 Utilities Machine hours 1,900 Bottling department Bottles Units $ 84,450 Labeling Labels per bottle 25,680 Machine setup Setups 38,000 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 $6 35 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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Question: Problem 17-4A Evaluating product line costs and prices using ABC LO P3 Bright Day Company produces two beverages, Hi-Voltage and EasySlim. Data about these products

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

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

	Hi-Voltage		EasySlim
Production volume	11,500	bottles	270,000	bottles
Liquid materials	1,400	gallons	35,000	gallons
Dry materials	1,020	pounds	3,000	pounds
Bottles	11,500	bottles	270,000	bottles
Labels	4	labels per bottle	3	label(s) per bottle
Machine setups	1,200	setups	700	setups
Machine hours	200	MH	3,600	MH

Additional data from its two production departments follow.

Department	Driver	Cost
Mixing department
Liquid materials	Gallons	$	2,548
Dry materials	Pounds		2,010
Utilities	Machine hours		1,900
Bottling department
Bottles	Units	$	84,450
Labeling	Labels per bottle		25,680
Machine setup	Setups		38,000

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 $6.35 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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