Crispi Brewing, is a small brewing company that manufactures small-batch beers. They produce only 12 oz. cans of beer for distribution and sale. To make the beer, the grain is boiled to make a wort. That wort is then boiled with hops to add flavor, aroma, and bitterness. The boiled wort is then cooled as it is added to a fermentation vessel, where yeast is added and the cooled wort is left to ferment. After the fermentation is complete, the beer is transferred to a bright tank and filtered. Finally, the beer is carbonated and added to cans. Melissa is the brewer. She is an employee of Crispi and her only role is to make the beer (i.e. salary is fixed). The beer is made in a warehouse that includes the necessary equipment to brew and can the beer. Rent for the space is $3,000 per quarter, and utilities for the quarter are also $3,000 (consider both to be fixed). The brewing equipment, including the canning machine and the refrigeration cost $316,000. That equipment is depreciated straight-line over ten years such that the equipment expense is $7,900 per quarter. There is no additional expense for storing the equipment, material, or finished goods.

The Ending Balance of inventory on Dec. 31, 2021:

Item	Ending Amount	Ending Balance ($)
Grain (RM)	1,000 lbs	$700
Hops (RM)	100 lbs	$1,200
Empty Cans (RM)	20,000	$7,000
Finished Cans of Beer (Finished Goods)	1,000	$800
Beer in Fermentation or Bright Tanks (WIP)	?	$29,000

In the first quarter of 2022, Crispi sold 78,000 cans of Crispi beer. The net revenue from the sales was $58,500.

During the first quarter of 2022, Crispi incurred the following costs (some of which are purchases of Raw Materials-which are added to RM, and some of which are period expenses-which go directly to the income statement). You will need to figure out how much RM was used in production, based on Beginning Balance + Purchases - Ending Balance.:

Item	Expense ($)
Wages to Melissa for Production	$15,000
Rent for the Warehouse	$3,000
Grain	$9,500
Hops	$6,000
Empty Cans	$25,200
Utilities	$3,000
Advertising Expenses	$900
Other General and Administrative Expenses	$1,500

The ending balance at the end of the first quarter of 2022 was as follows:

Item	Ending Amount	Ending Balance ($)
Grain (RM)	1,500 lbs	$1,050
Hops (RM)	200 lbs	$2,400
Empty Cans (RM)	10,500	$3,675
Finished Cans of Beer (Finished Goods)	4,500	$3,780
Beer in Fermentation or Bright Tanks	?	$32,000

Please answer the following questions assuming that Crispi uses Full Absorption costing unless specified otherwise. Also, please consider the empty can as part of the product that is sold, it is part of COGM and COGS.

1) What is the TOTAL Cost of Goods Sold in the first quarter of 2022? (HInt: First solve how much

Raw Materials was used in Production. You will then know your total Production costs added to

WIP, from which you will be able to calculate what was your Cost of Goods Manufactured, or how

much was transferred to Finished Goods. From here, you can calculate total Cost of Goods Sold (or

what is transferred out of Finished Goods).

2) What is the Net Income for the first quarter of 2022? This was all given to you in the problem set,with the exception of COGS which you calculated above

3) How many cans of beer were produced in the first quarter of 2022?

What is the COGM per can (please round your answer to the nearest penny)

4) Crispi is considering a new contract with Melissa, where the salary remains the same, but there is a

bonus if cost of goods manufactured per unit decreases by $0.05 per can of beer compared with the

cost of goods manufactured per unit in the first quarter of 2022. The bonus is not included when

determining whether she has obtained the goal. Assuming the variable costs, the depreciation

expense, and the rent and utilities would all remain the same will Melissa earn a bonus if she

produces 82,000 cans of beer?

5) Crispi is considering a new contract with Melissa, where the salary remains the same, but there is a

bonus if cost of goods manufactured per unit decreases by $0.05 per can of beer compared with the

cost of goods manufactured per unit in the first quarter of 2022. The bonus is not included when

determining whether she has obtained the goal. Assuming the variable costs, the depreciation

expense, and the rent and utilities would all remain the same will Melissa earn a bonus if she

produces 100,000 cans of beer? For the next set of questions, please assume that Melissa can acquire

any variable inputs such as cans or direct material at the same cost per unit as necessary to produce the

100,000 cans.

We know that variable and fixed costs remain the same. Therefore, the only way she could reduce cost per

can is to spread the fixed costs over more units. We know how much-fixed costs were incurred this quarter,

and how many cans were produced. From that you can determine the change is fixed cost per can.

What is the TOTAL Cost of Goods Sold in the first quarter of 2022? (Hint: First solve how much Raw Materials was used in Production. You will then know your total Production costs1) added to WIP, from which you will be able to calculate what was your Cost of Goods Manufactured, or how much was transferred to Finished Goods. From here, you can calculate total Cost of Goods Sold (or what transferred out of Finished Goods).

2)How many cans of beer were produced in the first quarter of 2022? What is the COGM per can (please round your answer to the nearest penny

What is the Net Income for the first quarter of 2022? This was all given to you in the problem set, with the exception of COGS which you calculated above.