South Dakota Microbrewery

QUESTION 1 Plant-wide allocation based
Predetermined overhead rate =$116750/7500 DL hours =$15.57 per direct labor-hours Overhead cost Direct cost Total cost Cost per batch Cost 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 Cost Allocation rate Buffalo Ale Bismark Bock Four 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 based ABC Buffalo Ale Bismarck Bock Four heads Stout Buffalo Ale Bismark Bock Four heads Stout
Expected batches sold 250 120 120 250 120 120
Number of Bottles per Batch 528 384 432 528 384 432
Expected Bottles sold 132,000 46,080 51,840 132,000 46,080 51,840 Cost per bottle $0.85 $0.91 $0.86 $0.60 $1.60 $0.87
Selling price per bottle 1.05 1.5 1.4 1.05 1.5 1.4
Gross margin per bottle 0.2 0.59 0.54 0.45 -0.1 0.53
Gross margin per batch $105.6 $226.56 $233.28 $237.6 -$38.4 $228.96
Gross margin percentage 19.05% 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 based Activity-based cost system
Advantages 1.Simple
2. Lower expense
3.easy for one product line 1. Accurate
2. Best for multi-