FileName: 0e82a51492fdb9f32401dce01dd27c509b6f6caa.xls, Tab: Problem P4-2A, Page 1 of 2, 12/28/2011, 19:02:01
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sells, in 1-gallon jugs, roughly
800,000
gallons per year of a low-cost, high volume product called StarDew. It also produces
and sells roughly
200,000
gallons per year of a low-volume, high-cost product called VineRose. VineRose is sold in 1-liter
bottles; thus
200,000
gallons results in roughly
800,000
bottles. Based on recent data, the StarDew product has
Traditional Costing
StarDew
VineRose
Direct materials per gallon
1.100
2.400
Direct labor per gallon
0.500
1.000
Mfg overhead per gallon
0.075
0.150
Total direct labor hours
60,000
30,000
Activity Cost Pool
Cost Driver
StarDew
VineRose
Grape processing
Carts of grapes
$189,000
10,000
8,000
2,000
Aging
Total months
416,000
10,400,000
800,000
9,600,000
Bottling and corking
Number of bottles
360,000
1,600,000
800,000
800,000
Labeling and boxing
Number of bottles
240,000
1,600,000
800,000
800,000
Number of inspections
280,000
560
160
400
$1,485,000
Overhead cost per labor hour is
Formula
Formula
Products
Manufacturing Costs
StarDew
VineRose
Direct materials
Amount
Amount
Direct labor
Amount
Amount
Overhead
Amount
Amount
Total manufacturing costs
Formula
Formula
Label
Amount
Amount
Formula Label
Label
Amount
Amount
Formula Label
Label
Amount
Amount
Formula Label
Label
Amount
Amount
Formula Label
Label
Amount
Amount
Formula Label
Formula
StarDew
VineRose
Activity Cost Pools
Cost Assigned
Label
Amount
Amount
Formula
Amount
Formula
Formula
Label
Amount
Amount
Formula
Amount
Formula
Formula
Label
Amount
Amount
Formula
Amount
Formula
Formula
Label
Amount
Amount
Formula
Amount
Formula
Formula
Label
Amount
Amount
Formula
Amount
Formula
Formula
Total cost assigned
Formula
Formula
Gallons produced