The Quench Beverage Company bottles soft dunks into aluminum cans. The manufacturing process consists of three activities:

a. Mixing: water, sugar, and beverage concentrate are mixed.

b. Filling: mixed beverage is filled into 12-oz. cans.

c. Packaging: properly filled cans are boxed into cardboard “fridge packs.”

The activity costs associated with these activities for the period are as follow.:

Mixing…………. $312,000

Filling…………….. 276,500

Packaging………… 71,500

Total………………. 660,000

The activity costs do not include materials costs, which are ignored for this analysis. Each can is expected to contain 12 ozs , 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 5,720,000 cans during the period, of which only 5,500,000 cans are actually packaged. The difference of 220,000 cans ate rejected due to underweight kicks.

A process improvement team has determined that cooling the cans prior to filling them mill reduce the amount of overflows due to expansion. After this improvement, the number of kicks is expected to decline from 220,000 cans to 55,000 cans.

a. Determine the total activity cost per packaged can under present operations. Round to the nearest cent.

$_______per can

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.

Answer rating: 100% (QA)

a Determining the total activity cost per package under present operation Activ... View the full answer