Rosehut Olive Oil Company makes two grades of olive oil: standard and extra virgin. Rosehut has identified
Question:
Rosehut Olive Oil Company makes two grades of olive oil: standard and extra virgin. Rosehut has identified two activity cost pools, the related costs per pool, the cost driver for each pool, and the expected usage for each pool.
Activity Total Activity Cost Cost Driver Standard Extra Virgin
Washing, Pressing & Filtering WPF $ Washing, Pressing, and Filtering hours hours hours
Bottling $ Number of bottles bottles bottles
Additional information about each grade of olive oil is as follows:
Grade Sales Revenue Direct Materials Costs Direct Labor Costs
Standard $ $ $
Extra Virgin $ $ $
Required:
Calculate the activity rate for each cost pool.
Using the activity rates, determine the total amount of overhead assigned to each product.
Determine total manufacturing cost for each product.
Calculate the gross profit for each product.
Managerial Accounting
ISBN: 978-1260413984
4th edition
Authors: Stacey Whitecotton, Robert Libby, Fred Phillips