Problem 1: Crown Co. (Cost Center Performance Evaluation) Crown Co. produces beverage cans. The manufacturing division of Crown Co. is classified as a cost center. For performance evaluation of the manufacturing division, Crown Co. has specified the following standards for a batch that comprises 1,000 beverage cans: For a given month, the manufacturing division incurs the following costs if it produces 10,000 batches of aluminum cans: a) For each cost above, compute the variance and indicate if the variance is favorable or unfavorable. Analyze overall variance and indicate if it is favorable or unfavorable. Compute the actual cost per batch of 1,000 beverage cans and compare to standard cost per batch of 1,000 beverage cans. (3 points) b) In analyzing the performance of the manufacturing division, Crown Co. assumes all costs to be variable. However, the manager of the manufacturing division knows that, whereas the aluminum and direct labor costs are entirely variable, OH costs for the division are entirely fixed. For the month above, compute the costs incurred by the manufacturing division if the manufacturing division produced 12,000 batches of beverage cans instead of 10,000 and compare them to the standard costs. Will the manager prefer to produce 12,000 batches? (3 points) \begin{tabular}{|c|c|c|c|c|c|c|c|c|} \hline & B & C & & E & F & G & & \\ \hline \multirow[t]{6}{*}{ a) } & & Standard Rate & Standard Amount & Actual Batches & Applied Standard & Actual Cost & Variance & F/U \\ \hline & Aluminum & & & 10,000 & & $302,000 & & \\ \hline & Direct Labor & & & 10,000 & & $111,000 & & \\ \hline & Overhead & & & 10,000 & & $70,000 & & \\ \hline & Total Costs & & & & & & & \\ \hline & Cost/unit & & & 10,000 & & & & \\ \hline & & & & & & & & \\ \hline & & & & & & & & \\ \hline \multirow[t]{6}{*}{ b) } & & Standard Rate & Standard Amount & Actual Batches & Applied Standard & Actual Cost & Variance & F/U \\ \hline & Aluminum & & & 12,000 & & & & \\ \hline & Direct Labor & & & 12,000 & & & & \\ \hline & Overhead & & & 12,000 & & & & \\ \hline & Total Costs & & & & & & & \\ \hline & Cost/unit & & & 12,000 & & & & \\ \hline \end{tabular}