Question: Answer following questions based on the scenario of Reynold Inc.: Reynold Inc. produces two Types of multivitamins in bottles, one for women the other for
Answer following questions based on the scenario of Reynold Inc.: Reynold Inc. produces two Types of multivitamins in bottles, one for women the other for men. Company produces 20,000 bottles of multivitamins for women and 15,000 for men. You can find the data provided by the company about these two products as follows: For men For women Total Direct materials per bottle S5 $7.5 Direct manufacturing $8.00 $8.00 labour rate per bottle Direct labour hours per 0.25 0.35 bottle Set up costs $55,000 Multivitamins bottles per 100 75 patch Set 1 hour per patch 2 up $75,000 Advertising costs $130,000 Total indirect manufacturing costs 20,000 15,000 Annual production Under the traditional costing system, the company uses a single indirect-cost pool and allocates costs to the two types of multivitamins on the basis of direct manufacturing labour-hours. Under this traditional system, determine product cost per bottle for each of the company's two products. (10 marks) b. Under ABC system, the company uses two indirect-cost pools. One cost pool is for set up costs and the other for advertising. For the two types of multivitamins, the company allocates set up costs based on setup labour-hours and allocates advertising costs based on the direct manufacturing labour-hours. Under ABC system, determine product cost per bottle for each of the company's two products. GEM
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