Reference no: EM132633795

Sweet Tooth has two production departments mixing and wrapping. It allocates overhead from the mixing department at a rate of $5.4/machine hour, while the wrapping department is allocated at a rate of $6.2/direct labour hour. The company has two products, Afternoon Sweet and Evening Delight, which are sold to customers in one kilogram bags. Direct costs and other actual information relating to production of these two products are shown below:

Actual information Afternoon Sweet Evening Delight

Direct Materials (per bag) $10.50 $12.50

Direct Labour (per bag) $ 6.60 $ 6.60

Machine hours used (per bag)

Mixing 0.10 hours 0.15 hours

Wrapping 0.06 hours 0.01 hours

Direct labour hours used (per bag)

Mixing 0.08 hours 0.02 hours

Wrapping 0.22 hours 0.28 hours

Question 1: Sweet Tooth calculates selling prices for its products using a mark up of 50% on full product cost. Calculate the selling price of Afternoon Sweet.