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using ABC , calculate manufacturing cost per gallon for chemical A and B

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Chemical plant produces two related products: Chemical A and Chemical B. Production of both chemicals uses the same machinery. For each chemical, there is a two stage production process: (1) raw materials are mixed and pressured heated in batches (batch level activity); and (2), chemicals are then packaged into a one gallon container by a packing machine. The packing machine packs each container separately (unit level activity). The packing machine requires 1 minute per container for Chemical A and 2 minutes per container for Chemical B. 1 Prime costs (direct materials and direct labor) are $50 per gallon for Chemical A and $70 per gallon for Chemical B. Manufacturing overhead costs for the year: $120,000 setup costs for batch production (setup cost per batch is the same for both products) $ 50,000 costs associated with packing machine (such as maintenance and depreciation) Prime costs (direct materials and direct labor) are $50 per gallon for Chemical A and $70 per gallon for Chemical B. Manufacturing overhead costs for the year: $120,000 setup costs for batch production (setup cost per batch is the same for both products) $ 50,000 costs associated with packing machine (such as maintenance and depreciation) For the year, the plant reported the following: Gallons Number Produced of Batches 4,000 20 3,000 40 Chemical A Chemical B 1 Required Lina ARC calculate manufacturing cost per gallon for Chemicals A and B

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