olG Misterials and labor transactions (Learning Objective 7) Standard Costs and Variances 691 Refer to the data in E11-23A. Requirements 1. ake the journal entries to record the direct labor e the journal entries to record the purchase and use of direct materials. Calculate the standard cost of a product before and after sed sustainability effort changes (Learning Objectives 1 & 4) Melford Cont tainers currently uses a recycled plastic to make bottles for the food industry SUSTAINABILITY t bottle production information: The cost and time standards per batch of 10,000 bottles are as follows sta Plastic 240 kilograms at $4.00 per kg Direct labor 2.0 hours at $20.00 per hour The variable manufacturing overhead rate is based on total estimated variable manufac- turing overhead of $400,000 and estimated total DLH of 10,000. Melford allocates its Proposed changes to bottle design and production process the bottle production process reengineered so that the plastic usage would drop by 30% manufacturing overhead based on direct labor hours (DLH overall due both to generating less scrap in the manufacturing process and using less in each bottle. In addition to decreasing the amount of plastic used in producing the bottles, the additional following benefits would be realized: Direct labor hours would be reduced by 20% because less scrap would be handled in a. the production process. b. Total estimated variable manufacturing overhead would be reduced by 10% because less scrap would need to be hauled away, less electricity would be used in the pro- duction process, and less inventory would need to be stocked. Requirements 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. 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. 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 imple ment 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? 2. 3. 4