Determine the batch and unit costs per gallon

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Reference no: EM131772295

Problem - Two-Stage Activity-Based Costing for Manufacturing

Assume Sherwin-Williams Company, a large print manufacturer, has determined the following activity cost pools and cost driver levels for the latest period:

Activity Cost Pool

Activity Cost

Activity Cost Driver

Machine Setup

$950,000

2,500 setup hours

Material Handling

820,000

5,000 materials moves

Machine Operation

200,000

20,000 machine hours

The following data are for the production of single batches of two products, Mirlite and Subdue:


Mirlite

Subdue

Gallons Produced

50,000

30,000

Direct labor hours

400

250

Machine hours

800

250

Direct labor cost

$10,000

$7,500

Direct Materials cost

$350,000

$150,000

Setup hours

15

12

Material moves

60

35

Determine the batch and unit costs per gallon of Mirlite and Subdue using ABC.

Reference no: EM131772295

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