A D Lemon-Lime Root Beer $105,000 25,000 60,000 110,000 4,000 20,000 $324,000 50,000 Orange Cola $ 7,600 2 Concentrate 3 Water 4 Sugar 5 Bottles 6 Flavor changeover 7 Conversion cost 8 Total cost transferred to finished goods 9| Number of cases $ 4,625 $129,000 30,000 1,250 2,000 3,000 72,000 4,800 8,800 10,000 5,500 132,000 3,000 4,800 24,000 $19,125 $391,800 2,500 1,750 2,800 $36,000 4,000 60,000 10
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:
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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. Prepare a memo to the production manager, analyzing this comparative cost information. In your memo, provide recommendations for further action, along with supporting schedules showing the total cost per case and cost per case by cost element.
Round all supporting calculations to the nearest cent.
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