Question

Ganges 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. Below is a simplified Botting Department cost of production report separating the costs of bottling the four flavors. А B с D Grape Cola Orange Root Beer Concentrate $ 6,650 $135,000 $99,000 $3,600 Water 2.100 36,000 27,000 1,200 Sugar 3,500 60,000 45,000 2,000 Bottles 7.700 132.000 99,000 4,400 Flavor changeover 3,500 6,000 4,500 5,000 Conversion cost 2,625 24,000 18,000 1,500 Total cost transferred to Finished Goods $26,075 $393,000 $292,500 $17,700 Number of cases 3,500 60,000 45,000 2,000 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. Complete the following analysis that illustrates the cost per case by cost element. Round all amounts to the nearest cent.

Answer 1

Cost Per Case by Cost Element = Cost of Individual Cost Element / Total Number of Cases

Ganges Bottling Company
Cost Per Case by Cost Element
	Grape	Cola	Orange	Root Beer
Concentrate	$1.90	$2.25	$2.20	$1.80
Water	$0.60	$0.60	$0.60	$0.60
Sugar	$1.00	$1.00	$1.00	$1.00
Bottles	$2.20	$2.20	$2.20	$2.20
Flavor Changeover	$1.00	$0.10	$0.10	$2.50
Conversion Cost	$0.75	$0.40	$0.40	$0.75
Total Cost Per Case	$7.45	$6.55	$6.50	$8.85

Grapes:

Cost of Each Element will be divided by Total Number of Cases of Grapes

Concentrate: $6,650 / 3,500 Cases = $1.90 Per Case

Water: $2,100 / 3,500 Cases = $0.60 Per Case

Sugar: $3,500 / 3,500 Cases = $1 Per Case

Bottles: $7,700 / 3,500 Cases = $2.20 Per Case

Flavor Changeover: $3,500 / 3,500 Cases = $1 Per Case

Conversion Cost: $2,625 / 3,500 Cases = $0.75 Per Case

Total Cost Per Case Transferred to Finished Goods: $26,075 / 3,500 Cases = $7.45 Per Case

Cola:

Cost of Each Element will be divided by Total Number of Cases of Cola

Concentrate: $135,000 / 60,000 Cases = $2.25 Per Case

Water: $36,000 / 60,000 Cases = $0.60 Per Case

Sugar: $60,000 / 60,000 Cases = $1 Per Case

Bottles: $132,000 / 60,000 Cases = $2.20 Per Case

Flavor Changeover: $6,000 / 60,000 Cases = $0.10 Per Case

Conversion Cost: $24,000 / 60,000 Cases = $0.40 Per Case

Total Cost Per Case Transferred to Finished Goods: $393,000 / 60,000 Cases = $6.55 Per Case

Orange:

Cost of Each Element will be divided by Total Number of Cases of Orange

Concentrate: $99,000 / 45,000 Cases = $2.20 Per Case

Water: $27,000 / 45,000 Cases = $0.60 Per Case

Sugar: $45,000 / 45,000 Cases = $1 Per Case

Bottles: $99,000 / 45,000 Cases = $2.20 Per Case

Flavor Changeover: $4,500 / 45,000 Cases = $0.10 Per Case

Conversion Cost: $18,000 / 45,000 Cases = $0.40 Per Case

Total Cost Per Case Transferred to Finished Goods: $292,500 / 45,000 Cases = $6.50 Per Case

Root Beer:

Cost of Each Element will be divided by Total Number of Cases of Root Beer

Concentrate: $3,600 / 2,000 Cases = $1.80 Per Case

Water: $1,200 / 2,000 Cases = $0.60 Per Case

Sugar: $2,000 / 2,000 Cases = $1 Per Case

Bottles: $4,400 / 2,000 Cases = $2.20 Per Case

Flavor Changeover: $5,000 / 2,000 Cases = $2.50 Per Case

Conversion Cost: $1,500 / 2,000 Cases = $0.75 Per Case

Total Cost Per Case Transferred to Finished Goods: $17,700 / 2,000 Cases = $8.85 Per Case