Answered step by step
Verified Expert Solution
Question
1 Approved Answer
What kinds of things would the Bottling Division be responsible for if it was a Cost Centre instead of a profit centre? Barrhaven-brew, a local
What kinds of things would the Bottling Division be responsible for if it was a Cost Centre instead of a profit centre?
Barrhaven-brew, a local Ottawa micro-brewery, recently merged with a bottle making plant in New York to complement its Barrhaven brewing facilities. Barrhaven-brew has two divisions: Bottle Making and Brewing. Each division is evaluated as a profit centre. Bottle Making Division The bottle making division makes cases of empty bottles and sells them on both the open market and to the brewing division. Other information is as follows: Capacity 340,000 cases Current Production 320,000 cases Market selling price $6.00 per case Variable costs $4.00 per case (based on current production) Fixed costs $1.80 per case (based on current production) Brewing Division The brewing division brews and bottles beer. It buys empty bottles from both the bottle making division and the open market. Other information is as follows: Capacity 300,000 cases Current Production 260,000 cases Market selling price $40.00 per case Variable cost* $28.00 per case (based on current production) Fixed cost $10.00 per case (based on current production) Note: The Variable cost per case includes an estimated cost of $6 per case of bottlesStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started