current bottle production information:

The cost and time standards per batch of 10,000

bottles are as follows:

Plastic 240 kilograms at $4.00 per kg

Direct labor 2.0 hours at $20.00 per hour

Requirement 1. Calculate the standard cost per batch of 10,000

bottles using the current data (before the company makes any changes). Include direct materials, direct labor, and variable manufacturing overhead (MOH) in the standard cost per unit.

Manufacturing cost	Standard cost per batch
Direct materials
Direct labor
Variable MOH
Total standard cost

Requirement 2. Calculate the standard cost per batch of 10,000

bottles if the company makes the changes to the bottle design and production process so that less plastic is used. Include direct materials, direct labor, and variable manufacturing overhead in the standard cost per unit. (Round interim calculations to two decimal places and the final answers to the nearest whole dollar.)

Manufacturing cost	Standard cost per batch
Direct materials
Direct labor
Variable MOH
Total standard cost

Requirement 3. Calculate the cost savings per batch by comparing the standard cost per batch under each scenario (current versus proposed change). (Enter the answer as a positive number rounded to the nearest wholedollar.)

The cost savings per batch is $

.

Assume that the total cost to implement the changes would be $106,400.

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?

First select the formula to compute the number of batches to recoup the cost of implementing the change, then compute the number of batches. (Round all amounts to the nearest whole number.)

				Number of batches to
	/		=	recoup cost of implementing

/

=

Requirement 4. What other benefits might arise from making this change to using less plastic in the manufacture of the bottles? Are there any risks?

The company will recognize cost savings once				batches have been produced. Not only will the company reap financial
benefits, but also the company will					The company faces the risk that