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Process Activity Analysis Brite Beverage Company bottles soft drinks into aluminum cans. The manufacturing process consists of three activities: Mixing: water, sugar, and beverage concentrate

Process Activity Analysis
Brite Beverage Company bottles soft drinks into aluminum cans. The manufacturing process consists of three activities:
Mixing: water, sugar, and beverage concentrate are mixed.
Filling: mixed beverage is filled into 12-oz. cans.
Packaging: properly filled cans are boxed into cardboard fridge packs.
The activity costs associated with these activities for the period are as follows:
Line Item Description Amount
Mixing $341,000
Filling 303,000
Packaging 161,000
Total $805,000
The activity costs do not include materials costs, which are ignored for this analysis. Each can is expected to contain 12 ounces of beverage. Thus, after being filled, each can is automatically weighed. If a can is too light, it is rejected, or kicked, from the filling line prior to being packaged. The primary cause of kicks is heat expansion. With heat expansion, the beverage overflows during filling, resulting in underweight cans.
This process begins by mixing and filling 11,960,000 cans during the period, of which only 11,500,000 cans are actually packaged. 460,000 cans are rejected due to underweight kicks.
A process improvement team has determined that cooling the cans prior to filling them will reduce the amount of overflows due to expansion. After this improvement, the number of kicks is expected to decline from 460,000 cans to 115,000 cans, thus increasing the number of filled cans to 11,845,000[11,500,000+(460,000115,000)].

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