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Problem 1 Meet Over a Beer (MOB) Brewery makes two beers: Ale and NonAlc. Each of these goes through the same processes: brewing the beer, bottling the beer, and inspecting the beer. The brewery plans to make 8,000 bottles of Ale and 2,000 bottles of NonAlc each month. The brewery has determined the indirect costs of each of these processes and an allocation base for each process. The estimated costs and expected use of each of these allocation bases for the production of the two beers for an average month is reported below: Process brewing bottling inspecting Indirect Costs $5,000 $11,000 $4,000 Allocation Base Direct labor machine hours bottles Forecasted Base by Product Ale NonAlc Total 65 hours 25 hours 90 hours 80 hours 30 hours 110 hours 8,000 bottles 2,000 bottles 10,000 bottles Other pertinent information: Cost for ingredients and bottles for Ale is $0.35 per bottle Cost for ingredients and bottles for NonAlc is $0.25 per bottle The labor costs to make a bottle of beer is the same for each type of beer, $0.15 per bottle. A) Determine the application rates for each product. Brewing = Bottling = Inspecting = B) Determine the product cost for 1 bottle of ale and 1 bottle of Nonal Ale Nonalc What are some benefits/reasons for using Activity Based Costing/ Activity Based Management

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