Process Activity Analysis The Brite Beverage Company bottles soft drinks into aluminum cans. The manufacturing process...

Process Activity Analysis

The Brite Beverage Company bottles soft drinks into aluminum cans. The manufacturing process consists of three activities:

Mixing: water, sugar, and beverage concentrate are mixed.

Filling: mixed beverage is filled into 12-oz. cans.

Packaging: properly filled cans are boxed into cardboard "fridge packs".

The activity costs associated with these activities for the period are as follows:

Mixing	$612,000
Filling	543,000
Packaging	165,000
Total	$1,320,000

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 11,440,000 cans during the period, of which only 11,000,000 cans are actually packaged. 440,000 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 440,000 cans to 110,000 cans, thus increasing the number of filled cans to 11,330,000 [11,000,000 + (440,000 - 110,000)].

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

Check My Work

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

The Brite Beverage Company bottles soft drinks into aluminum cans. The manufacturing process consists of three...

The Brite Beverage Company bottles soft drinks into aluminum cans. The manufacturing process consists of three activities: Mixing: water, sugar, and beverage concentrate are mixed. Filling: mixed beverage is filled into 12-oz. cans. Packaging: properly filled cans are boxed into cardboard "fridge packs". The activity costs associated with these activities for the period are as follows: Mixing $268,000 Filling 237,000 Packaging 95,000 Total $600,000 The activity costs do not include materials costs, which are ignored for this analysis. Each can...

Diet versus Regular Soft Drinks (take assumptions or random readings) Cans of soft drinks are so...

Diet versus Regular Soft Drinks (take assumptions or random readings) Cans of soft drinks are so common that many people have done much of this exploration without realizing it. You, too, have probably cooled soft drink cans in ice water for a picnic. Here is your opportunity to see if you can make some generalizations about their behavior in water. Materials • 1 12-fl oz (355 mL) aluminum can of diet soft drink, unopened • 1 12-fl oz (355 mL) aluminum...

Culver company bottles and distributes be light a diet soft drink the beverage is sold for...

Culver company bottles and distributes be light a diet soft drink the beverage is sold for $0.50 per 16 oz bottle to the retailers who charge customers $0.75 per bottle for the year 2017 management estimates the following revenues and cost sales $1,840,000 direct materials $440,000 direct labor $320,000 manufacturing overhead variable $350,000 manufacturing overhead fixed $498,000 selling expenses variable $50,000 selling expenses fixed $50,000 administrative expenses variable $36,000 and administrative expenses fixed $54,000 prepare a CVP income statement for...

Krandolph Metals, Inc., is a manufacturer of aluminum cans for the beverage industry. Krandolph purchases aluminum...

Krandolph Metals, Inc., is a manufacturer of aluminum cans for the beverage industry. Krandolph purchases aluminum and other raw materials from several vendors. The purchasing process at Krandolph occurs as follows: When inventory of any raw material seems low, a purchasing agent examines the records to determine the vendor who supplied the last purchase of that raw material. The purchasing agent prepares a three‐copy PO and mails the top copy to the vendor. One copy is filed in the purchasing...

A soft-drink manufacturer purchases aluminum cans from an outside vendor. A random sample of 70 cans...

A soft-drink manufacturer purchases aluminum cans from an outside vendor. A random sample of 70 cans is selected from a large shipment, and each is tested for strength by applying an increasing load to the side of the can until it punctures. Of the 70 cans, 59 meet the specification for puncture resistance. a) Find a 95% confidence interval for the proportion of cans in the shipment that meet the specification. Round the answers to three decimal places. b) Find...

Monty Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50...

Monty Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers, who charge customers 75 cents per bottle. For the year 2017, management estimates the following revenues and costs. Sales $1,640,000 Selling expenses—variable $50,000 Direct materials 420,000 Selling expenses—fixed 70,000 Direct labor 350,000 Administrative expenses—variable 30,000 Manufacturing overhead—variable 380,000 Administrative expenses—fixed 48,000 Manufacturing overhead—fixed 208,250 1.Prepare a CVP income statement for 2017 based on management’s estimates. MONTY COMPANY CVP...

Blossom Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50...

Blossom Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers, who charge customers 75 cents per bottle. For the year 2020, management estimates the following revenues and costs. Sales $1,950,000 Selling expenses—variable $67,000 Direct materials 550,000 Selling expenses—fixed 61,000 Direct labor 350,000 Administrative expenses—variable 28,000 Manufacturing overhead—variable 370,000 Administrative expenses—fixed 59,250 Manufacturing overhead—fixed 260,000 Correct answer iconYour answer is correct. Prepare a CVP income statement for 2020 based...

Jorge Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50...

Jorge Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers, who charge customers 75 cents per bottle. For the year 2020, management estimates the following revenues and costs. Sales $1,800,000 Selling expenses—variable $70,000 Direct materials 430,000 Selling expenses—fixed 65,000 Direct labor 360,000 Administrative expenses—variable 20,000 Manufacturing overhead—variable 380,000 Administrative expenses—fixed 60,000 Manufacturing overhead—fixed 280,000 Prepare a CVP income statement for 2020 based on management’s estimates. Calculate variable...

Wildhorse Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50...

Wildhorse Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers, who charge customers 75 cents per bottle. For the year 2020, management estimates the following revenues and costs. Sales $1,750,000 Selling expenses—variable $108,000 Direct materials 450,000 Selling expenses—fixed 54,000 Direct labor 400,000 Administrative expenses—variable 22,000 Manufacturing overhead—variable 420,000 Administrative expenses—fixed 71,000 Manufacturing overhead—fixed 120,000 Compute the break-even point in (1) units and (2) dollars. (Round answers to 0...

Cullumber Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 60...

Cullumber Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 60 cents per 16-ounce bottle to retailers, who charge customers 75 cents per bottle. For the year 2020, management estimates the following revenues and costs. Sales $1,800,000 Selling expenses—variable $105,000 Direct materials 510,000 Selling expenses—fixed 62,000 Direct labor 390,000 Administrative expenses—variable 25,000 Manufacturing overhead—variable 410,000 Administrative expenses—fixed 96,000 Manufacturing overhead—fixed 130,000 Prepare a CVP income statement for 2020 based on management’s estimates. Calculate variable cost...

Subjects