Problem $2$: $(15$ points$)$ The Kombucha Fermenters makes two types of Kombucha: Sencha and Maccha. Each of these goes through the same processes: fermenting, bottling, and inspecting. The company plans to make $10,000$ bottles of Sencha and $2,000$ bottles of Maccha each month. The accountant has determined the indirect costs of each of these processes and an allocation base for each process. The estimated costs and expected use of each of these allocation bases for production is reported below: Problem $2$: $(15$ points$)$ The Kombucha Fermenters makes two types of Kombucha: Sencha

and Maccha. Each of these goes through the same processes: fermenting, bottling, and

inspecting. The company plans to make $10,000$ bottles of Sencha and $2,000$ bottles of

Maccha each month. The accountant has determined the indirect costs of each of these

processes and an allocation base for each process. The estimated costs and expected use of

each of these allocation bases for production is reported below:

Each batch of Sencha takes $140$ direct labor hours, and each batch of Maccha takes $30$ direct labor

hours.

Each batch of Sencha takes $25$ machine hours, and each batch of Maccha takes $10$ machine hours.

Each batch of Sencha uses $10,000$ bottles, and each batch of Maccha uses $2,000$ bottles.

Other pertinent information:

Cost for ingredients and bottles for Sencha is $$0\mathrm{.}30$ per bottle

Cost for ingredients and bottles for Maccha is $$0\mathrm{.}25$ per bottle

The labor costs to make a bottle of kombucha are the same for each type of kombucha, $$0\mathrm{.}30$

per bottle.

A$.$ Determine the application rates for each process

B$.$ Determine the product cost for $1$ batch $(10,000$ bottles$)$ of Sencha and $1$ batch $(2,000$

bottles$)$ of Maccha. Problem $2$: $(15$ points$)$ The Kombucha Fermenters makes two types of Kombucha: Sench

and Maccha. Each of these goes through the same processes: fermenting, bottling, and

inspecting. The company plans to make $10,000$ bottles of Sencha and $2,000$ bottles of

Maccha each month. The accountant has determined the indirect costs of each of these

processes and an allocation base for each process. The estimated costs and expected use of

each of these allocation bases for production is reported below:

Each batch of Sencha takes $140$ direct labor hours, and each batch of Maccha takes $30$ direct labor

hours.

Each batch of Sencha takes $25$ machine hours, and each batch of Maccha takes $10$ machine hours.

Each batch of Sencha uses $10,000$ bottles, and each batch of Maccha uses $2,000$ bottles.

Other pertinent information:

Cost for ingredients and bottles for Sencha is $$0\mathrm{.}30$ per bottle

Cost for ingredients and bottles for Maccha is $$0\mathrm{.}25$ per bottle

The labor costs to make a bottle of kombucha are the same for each type of kombucha, $$0\mathrm{.}30$

per bottle.

A$.$ Determine the application rates for each process

B$.$ Determine the product cost for $1$ batch $(10,000$ bottles$)$ of Sencha and $1$ batch $(2,000$

bottles$)$ of Maccha.

Indirect Allocation

Process Costs Base Units of Allocation Base

fermenting $$102,000$ Direct labor $2040$ hours

bottling $$42,000$ machine hours $420$ hours

inspecting $$36,000$ bottles $144,000$ bottles

Each batch of Sencha takes $140$ direct labor hours, and each batch of Maccha takes $30$ direct labor hours.

Each batch of Sencha takes $25$ machine hours, and each batch of Maccha takes $10$ machine hours.

Each batch of Sencha uses $10,000$ bottles, and each batch of Maccha uses $2,000$ bottles.

Other pertinent information:

Cost for ingredients and bottles for Sencha is $$0\mathrm{.}30$ per bottle

Cost for ingredients and bottles for Maccha is $$0\mathrm{.}25$ per bottle

The labor costs to make a bottle of kombucha are the same for each type of kombucha, $$0\mathrm{.}30$ per bottle.

A$.$ Determine the application rates for each process

B$.$ Determine the product cost for $1$ batch $(10,000$ bottles$)$ of Sencha and $1$ batch $(2,000$ bottles$)$ of Maccha.