Financial & Managerial Accounting
14th Edition
ISBN: 9781337119207
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 26, Problem 26.19EX
Process activity analysis
The Brite Beverage Company hollies soft drinks into aluminum cans. The manufacturing process consists of three activities:
- 1. Mixing: water, sugar, and beverage concentrate are mixed.
- 2. Filling: mixed (leverage is filled into 12-oz. cans.
- 3. Packaging: properly filled cans are boxed into cardboard “fridge packs."
The activity costs associated with these activities for the period are as follows:
| Mixing | $216,000 |
| Filling | 168,000 |
| Packaging | 96,000 |
| Total | $480,000 |
The activity costs do not include materials costs, which are ignored for this anal) sis. 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 proce.ss begins by mixing and filling 6,300,000 cans during the period, of which only 6,000,000 cans are actually packaged. Three hundred thousand 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 300,000 cans to 63,000 cans, thus increasing the number of filled cans to 6,237,000 [6,000,000 + (300,000 – 63,000)].
- A. Determine the total activity cost per packaged can under present operations.
- 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.)
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Process Activity Analysis
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:
Line Item Description
Amount
Mixing
$132,000
Filling
168,000
Packaging
180,000
Total
$480,000
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…
Process Activity Analysis
The Brite Beverage Company bottles soft drinks into aluminum cans. The manufacturing process consists of three activities:
1. Mixing: water, sugar, and beverage concentrate are mixed.
2. Filling: mixed beverage is filled into 12-0z. cans.
3. Packaging: properly filled cans are boxed into cardboard "fridge packs."
The activity costs associated with these activities for the period are as follows:
Mixing
$574,000
Filling
509.000
Packaging
152,000
Total
$1,235,000
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 9,880,000 cans during the…
Process Activity Analysis
The Brite Beverage Company bottles soft drinks into aluminum cans. The manufacturing process consists of three activities:
1. Mixing: water, sugar, and beverage concentrate are mixed.
2. Filling: mixed beverage is filled into 12-oz. cans.
3. Packaging: properly filled cans are boxed into cardboard "fridge packs."
The activity costs associated with these activities for the period are as follows:
Mixing
$386,000
Filling
341,500
Packaging
97,500
Total
$825,000
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 7,800,000 cans during the…
Chapter 26 Solutions
Financial & Managerial Accounting
Ch. 26 - Prob. 1DQCh. 26 - Prob. 2DQCh. 26 - Why is a product-oriented layout preferred by lean...Ch. 26 - Prob. 4DQCh. 26 - Prob. 5DQCh. 26 - Why would a lean manufacturer strive to produce...Ch. 26 - Prob. 7DQCh. 26 - Prob. 8DQCh. 26 - Prob. 9DQCh. 26 - Why is the direct labor cost category eliminated...
Ch. 26 - Prob. 11DQCh. 26 - Prob. 12DQCh. 26 - Prob. 13DQCh. 26 - Lead time Rough Riders Inc. manufactures jeans in...Ch. 26 - Lean features Which of the following are features...Ch. 26 - Lean accounting The annual budgeted conversion...Ch. 26 - Cost of quality report A quality control activity...Ch. 26 - Process activity analysis Roen Company incurred an...Ch. 26 - Prob. 26.1EXCh. 26 - Prob. 26.2EXCh. 26 - Lean principles Active Apparel Company...Ch. 26 - Lead time analysis Palm Pals Inc. manufactures toy...Ch. 26 - Reduce setup time Hammond Inc. has analyzed the...Ch. 26 - Calculate lead time Flint Fabricators Int....Ch. 26 - Calculate lead time Williams Optical Inc. is...Ch. 26 - Prob. 26.8EXCh. 26 - Prob. 26.9EXCh. 26 - Lean principles for a restaurant The management of...Ch. 26 - Prob. 26.11EXCh. 26 - Lean accounting Westgate Inc. uses a lean...Ch. 26 - Lean accounting Modern Lighting Inc. manufactures...Ch. 26 - Lean accounting Vintage Audio Inc. manufactures...Ch. 26 - Pareto chart Meagher Solutions Inc. manufacture....Ch. 26 - Prob. 26.16EXCh. 26 - Pareto chart for a service company Three Rivers...Ch. 26 - Cost of quality and value-added/non-value-added...Ch. 26 - Process activity analysis The Brite Beverage...Ch. 26 - Process activity analysis for a service company...Ch. 26 - Prob. 26.21EXCh. 26 - Prob. 26.1APRCh. 26 - Lead time Sound Tek Inc. manufactures electronic...Ch. 26 - Lean accounting Dashboard Inc. manufactures and...Ch. 26 - Pareto chart and cost of quality report for a...Ch. 26 - Prob. 26.1BPRCh. 26 - Lead time Master Chef Appliance Company...Ch. 26 - Lean accounting Com-Tel Inc. manufactures and...Ch. 26 - Pareto chart and cost of quality report for a...Ch. 26 - Prob. 1ADMCh. 26 - Turn around time in an operating room of a...Ch. 26 - Prob. 3ADMCh. 26 - Ethics in Action In August, Lannister Company...Ch. 26 - Prob. 26.3TIF
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