Breeze beverage company manufacturing soft drinks, information about two products is as follows:   Volume sales price per case               Gross profit per case Dr

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Breeze beverage company manufacturing soft drinks, information about two products is as follows:

	Volume	sales price per case	Gross profit per case
Dr.kola	800.000 cases	$30	$12
Tahiti punch	10,000 cases	30	12

 

It is known that both products have the same direct materials and direct labor costs per case. Breeze beverage allocates factory overheads to products by using a single plantwide factory overhead rate, based on direct labor cost. Additional information about the two products is as follows Dr. Kola: Requires minor process preparation and sterilization prior to processing. The ingredients are acquired locally. The formation is simple, and it is easy to maintain quality. Lastly, the product is sold large bulk (full truckload) orders.
Tahiti Punch: Requires extensive process preparation and sterilization prior to processing. The ingredients are from Jamaica, requiring complex import controls. The formulation is complex, and it is thus difficult to maintain quality. Lastly, the product is sold in small (less than full truckload) orders.