Question - Bright Day Company produces two beverages, Hi-Voltage and EasySlim. Data about these products follow.
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Hi-Voltage
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EasySlim
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Production volume
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12,000 bottles
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210,000 Bottles
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Liquid materials
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2,000 gallons
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31,000 gallons
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Dry materials
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1,320 pounds
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4,000 pounds
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Bottles
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12,000 bottles
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210,000 bottles
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Labels
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4 labels per bottle
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3 label per bottle
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Machine setups
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1,000 setups
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300 setups
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Machine hours
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160 MH
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3,900 MH
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Additional data from its two production departments follow.
Determine the cost of each product line using ABC. What is the cost per bottle for Hi-Voltage and EasySlim?
Assume if Hi-Voltage sells for $7.45 per bottle, how much profit does the company earn per bottle of Hi-Voltage that it sells?
What is the minimum price that the company should set per bottle of EasySlim?