In: Accounting
Danone produces different kind of milkshakes, the production process starts with workers mixing milk with different kind of fruits, fruits flavors and other ingredients in a secret recipe. The company enhance the combined mixture with natural flavors. Finally, the company puts the mixture in special pots.
Danone incurs the following costs:
Sugar |
$30 |
Wages of workers who do the mixture |
$6,400 |
Marketing department salaries |
$730 |
Delivery truck drivers’ wages |
$150 |
Milk |
$5,000 |
Fruits flavorings |
$780 |
Lift truck operators’ salaries |
$1,120 |
Payment for new recipe |
$750 |
Salaries of factory cleaners |
$750 |
Yoghurt pots |
$1,300 |
Sales commissions |
$250 |
Customers services |
$210 |
Depreciation on delivery trucks |
$230 |
Depreciation on equipment |
$2,700 |
Natural fruits flavors |
$350 |
Insurance on plant building |
$250 |
Fruits |
$16,000 |
Instructions
Direct materials |
Direct labor |
Manufacturing overhead |
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Sugar |
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Wages of workers who do the mixture |
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Marketing department salaries |
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Delivery truck drivers’ wages |
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Milk |
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Fruits flavorings |
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Lift truck operators’ salaries |
|||
Payment for new recipe |
|||
Salaries of factory cleaners |
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Yoghurt pots |
|||
Sales commissions |
|||
Customers services |
|||
Depreciation on delivery trucks |
|||
Depreciation on equipment |
|||
Natural fruits flavors |
|||
Insurance on plant building |
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Fruits |
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Note: Answers Should be in Word Version Format Please
Answer : Classification of costs
(Amount in $ )
Expense | direct material | direct labour | manufacturing overhead | other than production cost |
Sugar | 30 | |||
Wages of workers who do mixture | 6400 | |||
Marketing department salaries | 730 | |||
Delivery truck driver wages | 150 | |||
Milk | 5000 | |||
Fruit flavoring | 780 | |||
Lift truck operators salaries | 1120 | |||
Payment for new recipe | 750 | |||
Salaries for factory cleaner | 750 | |||
Yoghurt pots | 1300 | |||
Sales commission | 250 | |||
Customers services | 210 | |||
Depreciation on delivery truck | 230 | |||
Depreciation on equipment | 2700 | |||
Natural fruit flavor | 350 | |||
Insurance on plant building | 250 | |||
Fruits | 16000 | |||
Total | 22160 | 6400 | 6870 | 1570 |
Total cost for each category
Direct Material $ 22160
Direct labour $ 6400
Manufacturing overhead $ 6870
And other than production cost $ 1570
If Danone produces 20000 pots in current year then average production cost per pot will be :
22160 + 6400 + 6870 = 35430
Cost per pot = 35430/ 20000
= $ 1.7715 per pot