Bottle Company Operates Many Bottling Plants Around the Globe

Essay

Bottle Company operates many bottling plants around the globe.At its Toronto plant, where nine different brands are bottled, the following costs were incurred in the current year to produce 15,000,000 cans of soft drink:
1.Development costs of adding the new product "Soda Plus" amounted to $614,000.2.Material handling costs of inspecting and handling concentrate, bottles, packages, and so forth amounted to $433,500.These costs are allocated to each production run.3.Incoming materials purchase costs that can be directly traced to individual products being canned and packaged.These costs are purely variable with output level and amounted to $2,213,000.4.Executive salaries and other central administration overhead amounted to $423,000.5.Plant overhead including costs related to: supervision, safety, energy and plant insurance amounted to $623,000.6.The cost of cleaning and calibrating equipment for each production run amounted to $171,500.Required:
a.Classify each of the preceding costs as output unit-level, batch-level, product-sustaining, or facility-sustaining.
b.Compute the cost per unit for the total manufacturing cost.