Mystic Bottling Company bottles popular beverages in the Bottling Department. The beverages are produced by blending concentrate with water and sugar. The concentrate is purchased from a concentrate producer. The concentrate producer sets higher prices for the more popular concentrate flavors. A simplified Bottling Department cost of production report separating the cost of bottling the four flavors follows: A B D E 1 Orange Cola Lemon-Lime Root Beer 2 Concentrate $ 4,625 $ 105,000 $ 7,600 $129,000 3 Water 1,250 30,000 25,000 2,000 4 Sugar 3,000 72,000 60,000 4,800 5 Bottles 5,500 132,000 110,000 8,800 6 Flavor changeover 7 Conversion cost 8 Total cost transferred to finished goods 9 Number of cases 3,000 4,800 4,000 10,000 1,750 24,000 20,000 2,800 $19,125 $391,800 $324,000 $36,000 2,500 60,000 50,000 4,000 10 Beginning and ending work in process inventories are negligible, so they are omitted from the cost of production report. The flavor changeover cost represents the cost of cleaning the bottling machines between production runs of different flavors. Determine the cost per case for each of the four flavors. Round your answers to two decimal places. Orange 1.43 X per case Cola a 2.50 x per case Lemon-Lime 2.50 X per case Root Beer 1.43 x per case
Mystic Bottling Company bottles popular beverages in the Bottling Department. The beverages are produced by blending concentrate with water and sugar. The concentrate is purchased from a concentrate producer. The concentrate producer sets higher prices for the more popular concentrate flavors. A simplified Bottling Department cost of production report separating the cost of bottling the four flavors follows: A B D E 1 Orange Cola Lemon-Lime Root Beer 2 Concentrate $ 4,625 $ 105,000 $ 7,600 $129,000 3 Water 1,250 30,000 25,000 2,000 4 Sugar 3,000 72,000 60,000 4,800 5 Bottles 5,500 132,000 110,000 8,800 6 Flavor changeover 7 Conversion cost 8 Total cost transferred to finished goods 9 Number of cases 3,000 4,800 4,000 10,000 1,750 24,000 20,000 2,800 $19,125 $391,800 $324,000 $36,000 2,500 60,000 50,000 4,000 10 Beginning and ending work in process inventories are negligible, so they are omitted from the cost of production report. The flavor changeover cost represents the cost of cleaning the bottling machines between production runs of different flavors. Determine the cost per case for each of the four flavors. Round your answers to two decimal places. Orange 1.43 X per case Cola a 2.50 x per case Lemon-Lime 2.50 X per case Root Beer 1.43 x per case
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:**Decision Making in Beverage Production: Cost Analysis Report**
Mystic Bottling Company produces a variety of popular beverages through its Bottling Department. This involves blending concentrate with water and sugar, which are purchased from a concentrate producer who sets differential pricing based on the beverage's popularity. Below is a streamlined report detailing the production costs for four different flavors.
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**Cost of Production Report by Flavor:**
| | Orange | Cola | Lemon-Lime | Root Beer |
|--------------------|---------|----------|------------|-----------|
| **Concentrate** | $4,625 | $129,000 | $105,000 | $7,600 |
| **Water** | 1,250 | 30,000 | 25,000 | 2,000 |
| **Sugar** | 3,000 | 72,000 | 60,000 | 4,800 |
| **Bottles** | 5,500 | 132,000 | 110,000 | 8,800 |
| **Flavor Changeover** | 3,000 | 4,800 | 4,000 | 10,000 |
| **Conversion Cost** | 7,750 | 24,000 | 20,000 | 2,800 |
| **Total Cost Transferred to Finished Goods** | $19,125 | $391,800 | $324,000 | $36,000 |
**Number of Cases Produced:**
- Orange: 2,500 cases
- Cola: 60,000 cases
- Lemon-Lime: 50,000 cases
- Root Beer: 4,000 cases
**Note:** The negligible impact of beginning and ending inventories has resulted in their exclusion from this report. The "Flavor Changeover" cost accounts for the expenses incurred in cleaning bottling machinery between flavor transitions.
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**Cost Analysis Per Case:**
To calculate the cost per case of each flavor, divide the total cost by the number of cases. The computations are as follows, rounded to two decimal places:
- **Orange:** $1.43 per case
- **Cola:** $2.50 per case
- **Lemon-Lime:** $2.50 per case
- **Root Beer:** $1.43 per case
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