s Wolanin Containers currently uses a recycled plastic to make bottles for the food industry.

View the current bottle production information.

View the proposed changes to bottle design and production process.

Read the requirements.

Bottle design and production process

Proposed changes to bottle design and production process:

The container division manager is considering having both the bottle

redesigned and the bottle production process reengineered so that the

plastic usage would drop by $20\%$ overall due both to generating less

scrap in the manufacturing process and using less plastic in each

bottle. In addition to decreasing the amount of plastic used in

producing the bottles, the additional following benefits would

be realized:

a$.$ Direct labour hours would be reduced by $15\%$ because less

scrap would be handled in the production process.

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

production process, and less inventory would need to be

stocked.

Current bottle production information

Current bottle production information:

The cost and time standards per batch of $10,000$

bottles are as follows:

Plastic $350$ kilograms at $$5\mathrm{.}00$ per $kg$

Direct labour $2\mathrm{.}0$ hours at $$22\mathrm{.}00$ per hour

Required

Calculate the standard cost per batch of $10,000$ bottles using the current data $($before th

company makes any changes$).$ Include direct materials, direct labour, 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 chanc

the bottle design and production process so that less plastic is used. Include direct mate

direct labour, and variable manufacturing overhead in the standard cost per unit.

Calculate the cost savings per batch by comparing the standard cost per batch under e

scenario $($current versus proposed change$).$ Assume that the total cost to implement the

changes would be $$141,508.$ How many batches of bottles would need to be produced :

change to have the cost savings total equal the cost to make the changes?

What other benefits might arise from making this change to using less plastic in the

manufacture of the bottles? Are there any risks? Requirement $1.$ Calculate the standard cost per batch of $10,000$ bottles using the current data $($before the company makes any changes$).$ Include direct materials, direct labour, and variable manufacturing overhead $($MOH$)$ in the standard cost per

unit.

Requirement $2.$ 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 labour, and variable manufacturing

overhead in the standard cost per unit. $($Round interim calculations to two decimal places and the final answers to the nearest cent.$)$

Manufacturing cost

Standard cost per batch

Direct materials

Direct labour

Variable MOH

Total standard cost of bottles would need to be produced after the change to have the cost savings total equal the cost to make the changes? $($Enter your answer to the nearest cent.$)$

The cost savings per batch is $9$

nearest cent.$)$

Requirement $4.$ What other benefits might arise from making this change to using less plastic in the manufacture of the bottles? Are there any risks?

The company will recognize cost savings once

batches have been produced. Not only will the company reap financial benefits, but also the company will

improve employee morale due to increases in direct labour.

The company faces the risk

that