Hoffman Bottling Company bottles popular beverages. The beverages are produced by blending concentrate with water and sugar. The concentrate is purchased from a concentrate producer. The concentrate producer sets higher prices for the more popular concentrate flavors. Below is a simplified cost of production report separating the cost of bottling the four flavors.

Beginning and ending work in process inventories are negligible, so are omitted from the cost of production report. The flavor changeover cost represents the cost of cleaning the bottling machines between production runs of different flavors. Prepare a memo to the production manager analyzing this comparative cost information. In your memo, provide recommendations for further action, along with supporting schedules showing the total cost per case and cost per case by costelement.

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Orange Cola Lemon-Lime Root Beer Concentrate Water Sugar Bottles Flavor changeover Conversion cost Total cost Number of cases S3,600 1,200 2,000 4,400 3,000 1,600 15,800 4,000 33,000 9,000 15,000 33,000 1,800 7,500 $99,300 30,000 $21,000 6,000 10,000 22,000 1,200 5,000 $65,200 20,000 S1,800 600 1,000 2,200 3,000 800 9,400 2,000