1. First, consider BubbleXs glass bottle manufacturing plant being developed for bottling wine. And imagine the manufacturing process covering the products life cycle. Then write a reflection on the risks or opportunity of investing in production resources.

2. Write a generalized reflection on manufacturing companys management of risk and opportunities related to their environmental, social and governance (ESG) landscape.

The Case Consider BubbleX Manufacturing Company, which makes glass bottles for bottling wine. BubbleX's management has observed that in the last five years, on average, for every set of total wine bottles budgeted for production in the Sparkling department, 20\% of the bottles are lost to spoilage (breakage) and constitute the driver for the company's internal failure costs. In the first quarter of 20XX, BubbleX incurred costs outlined in Exhibit A to put sparkling wine bottles into production. The units to account for consist of the beginning work in process as well as the good units completed and transferred out. Over the years, BubbleX has observed that 20 percent of units to account for are normal spoiled units. Going through the inspections, BubbleX's production manager, Maria Cortez discovers that 2 percent of the units to account for constitute abnormal spoiled units. At the executive meeting last week, the chief executive officer asked the department heads to find a way to respond to shareholder's concerns that the company needs to shift its strategy to include environmental, sustainability and government (ESG) management. Also, shareholders have indicated that they need to know what the company is doing to mitigate its climate-related risks. Consumer trends also have shown a shift towards industry competitors with clear ESG management strategies. The CEO stresses that the department will need to address shareholder concerns while balancing that with maintaining the company's operating income performance. Maria reasons that to fulfil the CEO's request, she must first start by identifying the costs of the 1 | Poge defective products and analyzing their effect on the operating income for the quarter. Maria decides to bring in a consultant to help the company achieve its goals. The company sells sparkling bottles at $9.50 and reports that monthly fixed costs will be $200,000 for the quarter. Exhibit A presents the production data for the accounting period. Level o Data for BubbleX Company at Month 1 (January 20XX) Level o Data for BubbleX Company at Month 2 (February 20XX) Levet 0 Data for BubbleX Company at Month 3 (March 20XX) Supporting Explanations \& Assumptions The leading world producers of wine report that the wine making industry incurs up to 1,750kWh or 6,300 Megajoules (MJ) of energy every year (Malvoni et al. 2017), and 30 percent of that is incurred in wine glass bottle production and packaging (Landi et al. 2019) making this a high energy consumption energy industry and thus providing sustainability risks and opportunities. For this case, we lean on the assumption that one glass wine bottle takes 0.222 Megajoules (MJ) energy to produce (Drescher 2022). Assumptions related to tracking the flow of manufacturing costs and identifying the cost of direct materials and conversion costs of a.) bottles that make it to good units; and b.) bottles lost to spoilage include the following: 1. At Level 0 , normal spoilage is 20% of units to account for. Intervention at Level 2 is a 5% decrease of normal spoilage by 5%, (or 15% of units to account for) while keeping abnormal spoilage of 2% constant throughout. 2. To apply a 5% increase in investment at Level 2 , first consider that at Level 0 , costs are estimated at a ratio of 1.2 per unit for direct materials and 2.2 for conversion costs. Recreate original data to incorporate a 5% increase in costs of production related to direct materials and conversion such that the ratio becomes 1.26 for direct materials and 2.31 for conversion costs. 2. Each preceding month's ending work in process inventory should be the next month's beginning inventory. 41p(4) 3. In conducting a weighted average process costing approach to accounting for spoilage, the original data at Level 0 calculates good units as 70% of all units to account for, therefore when dropping down the amount of spoilage by 5%, the good units should automatically increase to 75% of units to account for