Rosehut Olive Oil Company makes two grades of olive oil: standard and extra virgin. Rosehut has identified two activity pools, the related costs per pool, the cost driver for each pool, and the expected usage for each pool. Total Activity Cost Activity Washing, Pressing & Filtering (WPF) Bottling $1,550, 150 $ 453,000 Additional information about each grade of olive oil is as follows: Direct Materials Costs Grade Standard. Extra Virgin Sales Revenue $ 5,105,000 $ 2,150,000 Cost Driver Washing, Pressing, and Filtering hours. Number of bottles. Direct Labor Costs $ 900,000 $375,000 $ 600,000 $ 150,000 Required: 1. Calculate the activity rate for each activity pool. 2. Using the activity rates, determine the total amount of overhead assigned to each product. 3. Determine total manufacturing cost for each product. 4. Calculate the gross profit for each product. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Standard 45,200 hours 302,000 bottles Extra Virgin 105,300 hours 75,500 bottles

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Rosehut Olive Oil Company makes two grades of olive oil: standard and extra virgin. Rosehut has identified two activity pools, the
related costs per pool, the cost driver for each pool, and the expected usage for each pool.
Total Activity
Cost
Activity
Washing, Pressing & Filtering (WPF)
Bottling
$ 1,550,150
$ 453,000
Additional information about each grade of olive oil is as follows:
Direct
Materials
Costs
Grade
Standard
Extra Virgin
Sales Revenue
$ 5,105,000
$ 2,150,000
Required 1
$ 900,000
$ 600,000
Required:
1. Calculate the activity rate for each activity pool.
2. Using the activity rates, determine the total amount of overhead assigned to each product.
3. Determine total manufacturing cost for each product.
4. Calculate the gross profit for each product.
Required 2 Required 3
Cost Driver
Washing, Pressing, and Filtering hours
Number of bottles.
Complete this question by entering your answers in the tabs below.
Direct Labor
Costs
$ 375,000
$ 150,000
Required 4
Standard
45,200 hours
302,000 bottles
Extra Virgin
105,300 hours
75,500 bottles
Transcribed Image Text:Rosehut Olive Oil Company makes two grades of olive oil: standard and extra virgin. Rosehut has identified two activity pools, the related costs per pool, the cost driver for each pool, and the expected usage for each pool. Total Activity Cost Activity Washing, Pressing & Filtering (WPF) Bottling $ 1,550,150 $ 453,000 Additional information about each grade of olive oil is as follows: Direct Materials Costs Grade Standard Extra Virgin Sales Revenue $ 5,105,000 $ 2,150,000 Required 1 $ 900,000 $ 600,000 Required: 1. Calculate the activity rate for each activity pool. 2. Using the activity rates, determine the total amount of overhead assigned to each product. 3. Determine total manufacturing cost for each product. 4. Calculate the gross profit for each product. Required 2 Required 3 Cost Driver Washing, Pressing, and Filtering hours Number of bottles. Complete this question by entering your answers in the tabs below. Direct Labor Costs $ 375,000 $ 150,000 Required 4 Standard 45,200 hours 302,000 bottles Extra Virgin 105,300 hours 75,500 bottles
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