Two-Stage ABC for ManufacturingAssume Sherwin-Williams Company, a large paint manufacturer, has determined the following activity...

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Two-Stage ABC for ManufacturingAssume Sherwin-Williams Company, a large paint manufacturer, has determined the following activity cost pools and cost driver levels for the latest period:Activity Cost PoolActivity CostActivity Cost DriverMachine setup$920,0002,500 setup hoursMaterial handling790,0005,000 material movesMachine operation200,00020,000 machine hoursThe following data are for the production of single batches of two products, Mirlite and Subdue:MirliteSubdueGallons produced50,00030,000Direct labor hours400250Machine hours800250Direct labor cost$8,000$5,500Direct materials cost$320,000$120,000Setup hours1512Material moves6035Determine the batch and unit costs per gallon of Mirlite and Subdue using ABC.Round cost per gallon to two decimal places.Product CostsMirliteSubdueDirect materialsDirect laborManufacturing overhead:Machine setupsMaterial handlingMachine operationTotal cost per batchGallons producedCost per gallon

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