Kayla Friedlander
South Dakota Microbrewery Case Study
2/24/13

1. The total product and per bottle cost under allocation based on direct-labor hours for Buffalo Ale, Bismark Bock and Four Heads Stout is $450.86 and $0.85, $347.79 and $0.91 and $369.96 and $0.86, respectively. Under activity based costing the total product and per bottle cost for Buffalo Ale, Bismark Bock and Four Heads Stout is $317.58 and $0.60, $615.5 and $1.6 and $379.29 and $0.88, respectively. Calculations can be found in Appendix A.

2. The gross margin and gross margin percentage under allocation based on direct-labor hours for Buffalo Ale, Bismark Bock and Four Heads Stout is $103.54 and 19%, $228.21 and 40% and $234.84 and 39%, respectively. The gross
528=$0.85 | 347.79/384=$0.91 | 369.96/432=$0.86 |

b) Activity based costing Maintenance | 30000/2910=$10.31 | Mixing & Cooking | 8000/2910=$2.75 | Chilling & Siphoning | 7500/7500=$1 | Equipment Depreciation | 5500/82700=$0.067 | Quality Control | 10500/4850=$2.16 | Bottling & Labeling | 21000/229920=$0.091 | Storage | 3000/229920=$0.013 | Shipping | 31250/3740=$8.36 |

| Buffalo Ale | Bismark Bock | Four Heads Stout | Maintenance | (10.31)(3)=30.93 | (10.31)(14)=144.34 | (10.31)(4)=41.24 | Mixing & Cooking | (2.75)(3)=8.25 | (2.75)(14)=38.5 | (2.75)(4)=11 | Chilling & Siphoning | (1)(18)=18 | (1)(12)=12 | (1)(13)=13 | Equipment Depreciation | (.067)(110)=7.37 | (.067)(325)=21.78 | (.067)(135)=9.05 | Quality Control | (2.16)(5)=10.8 | (2.16)(22)=47.52 | (2.16)(8)=17.28 | Bottling and Labeling | (.091)(528)=48.05 | (.091)(384)=34.94 | (.091)(432)=39.31 | Storage | (0.13)(528)=6.86 | (.013)(384)=4.99 | (.013)(432)=5.68 | Shipping | (8.36)(2)=16.72 | (8.36)(18)=150.48 | (8.36)(9)=75.24 | Total MO | 146.98 | 454.55 | 211.74 | DM | 62.6 | 88.95 | 89.55 | DL | 108 | 72 | 78 | Total Cost | $317.58 | $615.5 | $379.29 | Per Bottle | 317.58/528=$0.60 | 615.5/384=$1.6 | 379.29/432=$0.88 | Appendix B
Sales
-Buffalo Ale: (1.05)(528)=554.4 -Bismark Bock: (1.5)(384)=576 -Four Heads Stout: (1.4)(432)=604.8

Gross margin – plant-wide allocation based on direct-labor hours | Buffalo Ale | Bismark Bock | Four Heads