Question

In: Accounting

Danone produces different kind of milkshakes, the production process starts with workers mixing milk with different...

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

  1. Classify each of the listed costs into three subcategories: direct materials, direct labor, manufacturing overhead:

Direct materials

Direct

labor

Manufacturing overhead

Sugar

Wages of workers who do the mixture

Marketing department salaries

Delivery truck drivers’ wages

Milk

Fruits flavorings

Lift truck operators’ salaries

Payment for new recipe

Salaries of factory cleaners

Yoghurt pots

Sales commissions            

Customers services

Depreciation on delivery trucks

Depreciation on equipment

Natural fruits flavors

Insurance on plant building

Fruits

  1. How much the total cost for each value chain category?

…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

  1. If Danone will produce 20 000 pots of milkshake this year, how much the average cost per pot?

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
           

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Note: Answers Should be in Word Version Format Please

Solutions

Expert Solution

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


Related Solutions

Your selling three different kinds of milkshakes (whole milk, almond milk and coconut milk) that are...
Your selling three different kinds of milkshakes (whole milk, almond milk and coconut milk) that are all the same size, 20 ounces.  They will sell for $8, $9 and $10 respectively.  Customers can choose from a variety of 10 different flavorings (vanilla, chocolate, salted caramel, hazelnut, strawberry, marionberry, blueberry, toffee, blue cheese and horseradish).  Following is the cost of materials for each of the different kinds of milkshakes: Ingredients                                                       Whole              Almond                        Coconut Milk                                                                  $  1.30             $  1.65                         $  1.75 Cream ($25 for 1 gallon = 128 oz.)                     (need 3 oz. for all kinds...
Sanchez & Company produces paints. On July 1, it had no work-in-process inventory. It starts production...
Sanchez & Company produces paints. On July 1, it had no work-in-process inventory. It starts production of 105,000 gallons of paint in July and completes 82,000 gallons. The costs of the resources used by Sanchez in July consist of the following:    Materials $ 286,444 Conversion costs (labor and overhead) 286,100 Required: The production supervisor estimates that the ending work-in-process is 88 percent complete. Compute the cost of paint transferred to finished goods and the amount in work-in-process ending inventory...
Sanchez & Company produces paints. On July 1, it had no work-in-process inventory. It starts production...
Sanchez & Company produces paints. On July 1, it had no work-in-process inventory. It starts production of 107,000 gallons of paint in July and completes 87,000 gallons. The costs of the resources used by Sanchez in July consist of the following: Materials $296,100 Conversion costs (labor and overhead) $274,800 Required: The production supervisor estimates that the ending work-in-process is 84 percent complete. Compute the cost of paint transferred to finished goods and the snount in work-in-process ending inventory as of...
Production Report Tomar Company produces vitamin energy drinks. The Mixing Department, the first process department, mixes...
Production Report Tomar Company produces vitamin energy drinks. The Mixing Department, the first process department, mixes the ingredients required for the drinks. The following data are for April: Work in process, April 1 — Quarts started 90,000 Quarts transferred out 75,000 Quarts in EWIP 15,000 Direct materials cost $84,000 Direct labor cost $168,000 Overhead applied $336,000 Direct materials are added throughout the process. Ending inventory is 60 percent complete with respect to direct labor and overhead. Required: Prepare a production...
Jackson Sound produces amplifiers and mixing boards in a modern production facility. The company is well...
Jackson Sound produces amplifiers and mixing boards in a modern production facility. The company is well known for its quality products. Each item is thoroughly tested before it leaves the plant. Workers are highly skilled. The company considers direct labor to be a fixed cost because it does not reduce the workforce when there is a small downturn in business, and it can accommodate production increases of up to 10 percent due to excess capacity. In the production process, workers...
Group of companies produces a kind of household appliances. The fixed production costs  are 30,000 $annually, the...
Group of companies produces a kind of household appliances. The fixed production costs  are 30,000 $annually, the variable production cost of the unit is 0.4, and the general administrative expenses are 8000$ .The company used to sell its production to wholesalers at 2$  per unit and achieve an annual sales figure of 50,000 Sales unit sees the sale to retailers directly as this will increase the sales volume by 10% per year and at the same time increase the selling price by...
BDB Company manufactures its one product by a process that requires two departments. The production starts...
BDB Company manufactures its one product by a process that requires two departments. The production starts in Department A and is completed in Department B. Direct materials are added at the beginning of the process in Department A. Additional direct materials are added when the process is 50% complete in Department B. Conversion costs are incurred proportionally throughout the production processes in both departments. On April 1, Department A had 500 units in Work-in-Process estimated to be 30% complete for...
Consider the following information about a simple country that produces two different goods: Year Price Milk...
Consider the following information about a simple country that produces two different goods: Year Price Milk Quantity Milk Price Cereal Quantity Cereal 2014 $4 200 $5 300 2015 $4.50 250 $5.50 330 2016 $5 300 $6.00 350 From 2014 to 2015 the growth rate of nominal GDP was % ___?___ and the growth rate of real GDP was % ___?___ Enter a number rounded to two decimal places.
Old Country Links, Inc., produces sausages in three production departments—Mixing, Casing and Curing, and Packaging. In...
Old Country Links, Inc., produces sausages in three production departments—Mixing, Casing and Curing, and Packaging. In the Mixing Department, meats are prepared and ground and then mixed with spices. The spiced meat mixture is then transferred to the Casing and Curing Department, where the mixture is force-fed into casings and then hung and cured in climate-controlled smoking chambers. In the Packaging Department, the cured sausages are sorted, packed, and labeled. The company uses the weighted-average method in its process costing...
(Appendix 6A) FIFO; Production Report Aztec Inc. produces soft drinks. Mixing is the first department, and...
(Appendix 6A) FIFO; Production Report Aztec Inc. produces soft drinks. Mixing is the first department, and its output is measured in gallons. Aztec uses the FIFO method. All manufacturing costs are added uniformly. For July, the mixing department provided the following information: Production: Units in process, July 1, 40% complete 20,000 gallons Units completed and transferred out 137,000 gallons Units in process, July 31, 55% complete 16,000 gallons Costs: Work in process, July 1 $40,000 Costs added during July 399,620...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT