Melford Containers currently uses a recycled plastic to make bottles for the food industry. (Click the icon to view the current bottle production information) The variable manufacturing overhead rate is based on total estimated variable manufacturing overhead of $400,000 and estimated total DLH of 10,000 . Melford allocates its variable manufacturing overhead based on direct labor hours (DLH). 1. Calculate the standard cost per batch of 10,000 bottles using the current data (before the company makes any changes). Include direct materials, direct labor, and variable manufacturing overhead in the standard cost per unit. 2. Calculate the standard cost per batch of 10,000 bottles if the company makes the changes to the bottle design and production process so that less plastic is used. Include direct materials, direct labor, and variable manufacturing overhead in the standard cost per unit. 3. Calculate the cost savings per batch by comparing the standard cost per batch under each scenario (current versus proposed change). Assume that the total cost to implement the changes would be $106,400. How many batches of bottles would need to be produced after the changes to have the cost savings total equal the cost to make these changes? What other benefits might arise from making this change to using less plastic in the manufacture of the bottles? Are there any risks? What would you recommend the company do? Melford Containers currently uses a recycled plastic to make bottles for the food industry. (Click the icon to view the current bottle production information) The variable manufacturing overhead rate is based on total estimated variable manufacturing overhead of $400,000 and estimated total DLH of 10,000 . Melford allocates its variable manufacturing overhead based on direct labor hours (DLH). 1. Calculate the standard cost per batch of 10,000 bottles using the current data (before the company makes any changes). Include direct materials, direct labor, and variable manufacturing overhead in the standard cost per unit. 2. Calculate the standard cost per batch of 10,000 bottles if the company makes the changes to the bottle design and production process so that less plastic is used. Include direct materials, direct labor, and variable manufacturing overhead in the standard cost per unit. 3. Calculate the cost savings per batch by comparing the standard cost per batch under each scenario (current versus proposed change). Assume that the total cost to implement the changes would be $106,400. How many batches of bottles would need to be produced after the changes to have the cost savings total equal the cost to make these changes? What other benefits might arise from making this change to using less plastic in the manufacture of the bottles? Are there any risks? What would you recommend the company do
