Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Brite Beverage Company bottles soft drinks into aluminum cans. The manufacturing process consists of three activities: 1. Mixing: water, sugar, and beverage concentrate

image text in transcribed

The Brite Beverage Company bottles soft drinks into aluminum cans. The manufacturing process consists of three activities: 1. Mixing: water, sugar, and beverage concentrate are mixed. 2. Filling: mixed beverage is filled into 12-oz. cans. 3. Packaging: properly filled cans are boxed into cardboard "fridge packs." The activity costs associated with these activities for the period are as follows: Mixing Filling $262,000 232,500 Packaging Total 195,500 $690,000 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+ (460,000 - 115,000)]. a. Determine the total activity cost per packaged can under present operations. Round to the nearest cent. per can b. Determine the amount of increased packaging activity costs from the expected improvements. $ c. Determine the expected total activity cost per packaged can after improvements. Round to three decimal places. per can

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Using Financial Accounting Information The Alternative to Debits and Credits

Authors: Gary A. Porter, Curtis L. Norton

9th edition

978-1285183244, 128518324X, 978-1285779263, 1285779266, 978-1285183237

More Books

Students also viewed these Accounting questions

Question

What are some of the topics studied?

Answered: 1 week ago