Table 1 Activity Purchasing Material Handling Mixing Chilling Packaging Quality Control Total MOH costs Canada Snowcones Ltd. - Budgeted MOH Costs Budgeted Cost (5000) Driver $ 60,000 Purchase Orders $ 71,250 Number of setups $ 91,500 Mixing hours $ 131,250 Chilling hours $ 82,500 Packaging machine hours $ 13,500 Number of batches $ 450,000 Budgeted Activity Level 829 1,766 920 1,856 1,020 206 Table 2 Canada Snowcones ltd. - Two Product Examples Peanut Butter Bacon Direct Material (DM) $ 2.20 per gallon Direct Labour (DL) $ 1.40 per gallon Budgeted Production and sales 1,500 gallons Size of Batch 100 gallons Number of setups 3 per batch Size of Purchase Order 40 gallons Time in mixer 0.40 hour per 100 gallons Time in chiller 1.50 hour per 100 gallons Time in package machine 0.50 hour per 100 gallons Chocolate $ 1.90 per gallon $ 1.40 per gallon 80,000 gallons 4,000 gallons 3 per batch 500 gallons 0.20 hour per 100 gallons 1.50 hour per 100 gallons 0.25 hour per 100 gallons Table 1 Activity Purchasing Material Handling Mixing Chilling Packaging Quality Control Total MOH costs Canada Snowcones Ltd. - Budgeted MOH Costs Budgeted Cost (5000) Driver $ 60,000 Purchase Orders $ 71,250 Number of setups $ 91,500 Mixing hours $ 131,250 Chilling hours $ 82,500 Packaging machine hours $ 13,500 Number of batches $ 450,000 Budgeted Activity Level 829 1,766 920 1,856 1,020 206 Table 2 Canada Snowcones ltd. - Two Product Examples Peanut Butter Bacon Direct Material (DM) $ 2.20 per gallon Direct Labour (DL) $ 1.40 per gallon Budgeted Production and sales 1,500 gallons Size of Batch 100 gallons Number of setups 3 per batch Size of Purchase Order 40 gallons Time in mixer 0.40 hour per 100 gallons Time in chiller 1.50 hour per 100 gallons Time in package machine 0.50 hour per 100 gallons Chocolate $ 1.90 per gallon $ 1.40 per gallon 80,000 gallons 4,000 gallons 3 per batch 500 gallons 0.20 hour per 100 gallons 1.50 hour per 100 gallons 0.25 hour per 100 gallons 2. What are the impacts, if there is any at all, of switching CSL's costing method? In particular, are the any significant contrasts between traditional costing and activity-based costing in terms of: a. Their impact on costs for independent products. b. Their effect on CSL's total firm income? (assuming everything else remains the same, such as production and sales prices) C. If there are significant contrasts, why are they present? If there are no significant contrasts, why are they not present? 3. What would you recommend to be Samantha's next step, based on this analysis? Explain. Table 1 Activity Purchasing Material Handling Mixing Chilling Packaging Quality Control Total MOH costs Canada Snowcones Ltd. - Budgeted MOH Costs Budgeted Cost (5000) Driver $ 60,000 Purchase Orders $ 71,250 Number of setups $ 91,500 Mixing hours $ 131,250 Chilling hours $ 82,500 Packaging machine hours $ 13,500 Number of batches $ 450,000 Budgeted Activity Level 829 1,766 920 1,856 1,020 206 Table 2 Canada Snowcones ltd. - Two Product Examples Peanut Butter Bacon Direct Material (DM) $ 2.20 per gallon Direct Labour (DL) $ 1.40 per gallon Budgeted Production and sales 1,500 gallons Size of Batch 100 gallons Number of setups 3 per batch Size of Purchase Order 40 gallons Time in mixer 0.40 hour per 100 gallons Time in chiller 1.50 hour per 100 gallons Time in package machine 0.50 hour per 100 gallons Chocolate $ 1.90 per gallon $ 1.40 per gallon 80,000 gallons 4,000 gallons 3 per batch 500 gallons 0.20 hour per 100 gallons 1.50 hour per 100 gallons 0.25 hour per 100 gallons Table 1 Activity Purchasing Material Handling Mixing Chilling Packaging Quality Control Total MOH costs Canada Snowcones Ltd. - Budgeted MOH Costs Budgeted Cost (5000) Driver $ 60,000 Purchase Orders $ 71,250 Number of setups $ 91,500 Mixing hours $ 131,250 Chilling hours $ 82,500 Packaging machine hours $ 13,500 Number of batches $ 450,000 Budgeted Activity Level 829 1,766 920 1,856 1,020 206 Table 2 Canada Snowcones ltd. - Two Product Examples Peanut Butter Bacon Direct Material (DM) $ 2.20 per gallon Direct Labour (DL) $ 1.40 per gallon Budgeted Production and sales 1,500 gallons Size of Batch 100 gallons Number of setups 3 per batch Size of Purchase Order 40 gallons Time in mixer 0.40 hour per 100 gallons Time in chiller 1.50 hour per 100 gallons Time in package machine 0.50 hour per 100 gallons Chocolate $ 1.90 per gallon $ 1.40 per gallon 80,000 gallons 4,000 gallons 3 per batch 500 gallons 0.20 hour per 100 gallons 1.50 hour per 100 gallons 0.25 hour per 100 gallons