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June Analyze Midstate Containers Inc.'s process costs Midstate Containers Inc, manufactures cans for the canned food industry. The operations manager of a can manufacturing operation

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June Analyze Midstate Containers Inc.'s process costs Midstate Containers Inc, manufactures cans for the canned food industry. The operations manager of a can manufacturing operation wants to conduct a cost study investigating the relationship of tin content in the material (can stock) to the energy cost for enameling the cans. The enameling was necessary to prepare the cans for labeling. A higher percentage of tin content in the can stock increases the cost of material. The operations manager believed that a higher tin content in the can stock would reduce the amount of energy used in enameling. During the analysis period, the amount of tin content in the steel can stock was increased for every month, from April to September. The following operating reports were available from the controller: April May July August September Materials $14,000 $34,800 $33,000 $21,700 $28,800 $33,000 Energy 13,000 28,800 24,200 14,000 17,100 16,000 Total cost $27,000 $63,600 $57,200 $35,700 $45,900 $49,000 JUnits produced + 50,000 + 120,000 + 110,000 +70,000 90,000 + 100,000 Cost per unit $0.54 $0.53 $0.52 $0.51 $0.51 $0.49 Differences in materials unit costs were entirely related to the amount of tin content. In addition, inventory changes are negligible and are ignored in the analysis. Calculate the materials cost per unit, energy cost per unit and total cost per unit for each month. Round your answers to the nearest cent. April May June July August September Materials cost per $ unit Energy cost per TO unit Total cost per unit Interpret your results. The calculations reveal that the tin content and energy costs are related. That is, as the materials cost increased due to higher tin content, the energy costs by more. Thus, the recommendation should be to raw can stock with the tin content at the per unit level. This is the material that the total production cost for this set of data. Additional data could be used to determine the optimal tin content, or the point where energy cost savings fail to overcome additional material costs

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