70.2K

Verified Solution

Link Copied!

Wayland containers currenty uses a recycled plastic to make bottes for the food industry (Cick the icon to view the curtent botte production iniormation) The varable manutacturing overhead rate is based on total estimased varable mamutachuring overhend of $600,000 and estimated total Di. H of 10,000 . Wayland aliocates as variable manutacturing overhead based on direct labor hours (OUH). Click the icon to view the proposed changes to bottie design and productich process Read the requitements More info More info Current bottle production information: The cost and time standards per batch of 10,000 boties ate as follows Plastic 300 kilograms at $500 per ki Direst labor 2.0 nours as sio. 00 per hour Proposed changes to bottle design and production process: The container division manager is considering having both the botte redesigned and the botie production process reengineered so that the. plastec isage would drop by 25%4 overaf due both to generating less scrap in the manulacturing process and using less plastic in each botte in addition to decreasing the arnowit of plastic used in producing the botses, the adstional following benefis would be realied a. Ourect labor hours would be teduced by zow because less sciap would ber handled in the production process. b. Total nstimated variable manutacturing ovemead would be reduced by 506 because less scrmp would need to be hauled away. less olectricity would be ised in the productiofl process, and tols mentory would need lo be [stocked Requirement 1. Calculate the standard cost per batch of 10,000 bottes using the current data (before the company makes any changes), Include direct araterials. direct labor, and variable manutacturing overhead (MOH) in the standard cost per unt. Requirement 2. Calculate the standard cost per batch of 10.000 bottles if the cornpany makes the changes to the botibe design and producton proctiss so that less plastic used. Include drect mazerias, direct toboe, and variable manufacturing owerhead in the standard cost per unit (Round interim calculabons to two debinal places and the fin answers to the nearest whole dolat) Requirement 3, Calculste the cost savengs per batch by comparing the standard cost per batch under each scenario (current versus proposed change). (Enter the answer a a positive number tounded to the nearest whole dollar) The cost savings per batch is Assume that the total cost to itpplement the changes would be 597,250 . How many batches of bottles would need to be produced after the changes to have the cost savings total equal the cost to make these changes? Fist select the formula to compute the number of batches to recoup the cost of implementing the change, then conpute the namber of batches. (Round all atiounts to the nearest whole number.)

Answer & Explanation Solved by verified expert

See Answer