Question

1. 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 Bottling Department cost of production report separating the costs of bottling the four flavors.

   A	B	C	D	E
   	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.

   Ganges Bottling Company
   Cost per Case by Cost Element
   	Grape	Cola	Orange	Root Beer
   Concentrate	$	$	$	$
   Water
   Sugar
   Bottles
   Flavor changeover
   Conversion cost
   Total cost per case	$	$	$	$

Answer 1

The cost per case is calculated dividing each cost element by Total number of cases working notes: 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 $0.101 $2.50 Conversion cost $0.75 $0.40 $0.40 $0.75 Total cost per case $7.45 $6.55 $6.50 $8.85 Grape $6,650 $2,100 $3,500 $7,700 $3,500 $2,625 3,500 Cola $135,000 $36,000 $60,000 $132,000 $6,000 $24,000 60,000 Orange Root Beer $99,000 $3,600 $27,000 $1,200 $45,000 $2,000 $99,000 $4,400 $4,500 $5,000 $18,000 $1,500 45,000 2,000 Cases