Wamsley Containers currently uses a recycled plastic to make bottles for the foo
ID: 2535198 • Letter: W
Question
Wamsley Containers currently uses a recycled plastic to make bottles for the food industry. (Click the icon to view the current bottle production information) The variable manufacturing overhead rate is based on total estimated variable manufacturing overhead of $300,000 and estimated total DLH of 10,000. Wamsley allocat its variable manufacturing overhead based on direct labor hours (DLH). (Click the icon to view the proposed changes to bottle design and production process.) Read the requirements 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 3,080 90 180 3,350 Direct materials Direct labor Variable ??? 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 plas 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 th final answers to the nearest whole dollar.) Manufacturing cost Standard cost per batch Direct materials Direct labor Variable ??? Total standard costExplanation / Answer
Manufacturing Cost after Bottle Design :
Direct Material 2156
Direct Labour 72
Variable Overhead 162
Total Cost 2390
By using less plastic, there will be less scrap ,less environmental loss, Cost saving as well as over all effective. Though it might lead to poor quality of the product, but if it comes under standards then is good to use less plastic and recommended to change the design and take the proposal ahead.
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