Exercise 5-11B Allocating facility-level costs and a product elimination decision York Corporation produces two types of juice that it packages in cases of 24 cans per case. Selected per-case data for the two products for the last month follow. York allocates production overhead using activity-based costing but allocates monthly packaging expense, which amounted to Page 246 $60,000 last month, to the two products equally. Required a. Compute the net profit for each product. b. Assuming that the overhead allocation for the tomato juice includes $30,000 of facility-level costs, would you advise York to eliminate this product? (Hint: Consider the method used to allocate the monthly packaging expense.)
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