South Dakota Microbrewery

Topics: Costs, Cost, Gross margin Pages: 3 (704 words) Published: September 9, 2013
QUESTION 1
Plant-wide allocation based
Predetermined overhead rate =$116750/7500 DL hours =$15.57 per direct labor-hours
Overhead costDirect costTotal costCost per batchCost per bottle Ale $15.57*18=$280.26 $62.60 $108 $450.86 $1.8 $0.85 Bock $15.57*12=$186.84 $88.95 $72 $347.79 $2.9 $0.91 Stout $15.57*13=$202.41 $89.55 $78

$369.96 $3.08 $0.86

Activity-based cost system
CostAllocation rateBuffalo AleBismark BockFour Heads Stout M&S$30,000 $10.31 $30.93 $144.34 $41.24
M&C$8,000 $2.75 $8.25 $38.50 $11.00
C&S$7,500 $1.00 $18.00 $12.00 $13.00
ED$5,500 $0.07 $7.70 $22.05 $9.45
QC$10,500 $2.16 $10.80 $47.52 $17.28
B&L$21,000 $0.09 $47.52 $34.56 $38.88
Storage$3,000 $0.01 $5.28 $3.84 $4.32
Shipping$31,250 $8.36 $16.72 $150.48 $75.24
Total OH cost $145.20 $453.29 $210.41
Total direct cost $62.60 $88.95 $89.55
Direct labor $108.00 $72.00 $78.00
Total direct cost per batch$315.80 $614.24 $377.96
Cost per bottle $0.60 $1.60 $0.87

Question 2
Plant-wide allocation basedABC
Buffalo AleBismarck BockFour heads StoutBuffalo AleBismark BockFour heads Stout Expected batches sold250120120250120120
Number of Bottles per Batch528384432528384432
Expected Bottles sold132,00046,08051,840132,00046,08051,840

Cost per bottle$0.85 $0.91 $0.86 $0.60 $1.60 $0.87
Selling price per bottle 1.051.51.41.051.51.4
Gross margin per bottle0.20.590.540.45-0.10.53
Gross margin per batch$105.6$226.56$233.28$237.6-$38.4$228.96 Gross margin percentage19.05% 39.33%38.57%42.86%-6.67%37.86% Gross margin for each label$26,400 $27,187 $27,994 $59,400 ($4,608)$27,475

Question 3
Plant-wide allocation basedActivity-based cost system
Advantages1.Simple
2. Lower expense
3.easy for one product line1. Accurate
2. Best for multi-...
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