Cola produces a lemon-lime soda. The production process starts with workers mixi
ID: 2604376 • Letter: C
Question
Cola produces a lemon-lime soda. The production process starts with workers mixing the lemon syrup and lime flavors in a secret recipe. The company enhances the combined syrup with caffeine. Finally, the company dilutes the mixture with carbonated water. Cola produces a lemon-lime soda. The production process starts with workers mixing the lemon syrup and lime flavors in a secret recipe. The company enhances the combined syrup with caffeine. Finally, the company dilutes the mixture with carbonated water.Requirements 1, 2 and 3. Classify each of these costs according to its category in the value chain and further break down production costs into three subcategories: Direct Materials (DM), Direct Labor (DL), or Manufacturing Overhead (MOH). Compute the total costs for each value chain category. (If a box is not used in the table, leave the box empty; do not enter a zero.) Data Table Plant janitors' wages Delivery truck drivers' wages $750 $315 Plant utilities Lime flavoring Rearrangment of plant layout Bottles Salt Sales commissions Production costs of "cents-off store coupons for customers . Lemon syrup Replace products with expired dates upon customer complaint$ Depreciation on plant and equipment .. . . . . . . . ._ . . . . . . . . . . . $ 3,500 Wages of workers who mix syrup ...____.......$8,200 .$350 $ 1,100 . .. . _. .. _ _ _. _ _ . _ _ . _. . . .__ _ _ . . 40 $ 275 $ 730 35 PrintDone
Explanation / Answer
Requirement 1, 2 and 3
Requirement 4
Requirement 5
The managers of R & D and Design are likely to cut their costs. This can increase costs of later value-chain elements.
Option D: All of the above
Cutting R & D and Design costs will result in increase in production, marketing, and customer service costs.
Cost R & D Design Production Direct Materials Direct Labor Manufacturing Overhead Marketing Distribution Customer Service Plant janitor's wages 750 Delivery truck driver's wages 315 Payment for new recipe 1040 Depreciation on delivery trucks 125 Plant utilities 350 Lime flavoring 1100 Rearrangement of plant layout 1500 Bottles 1410 Salt 40 Sales commissions 275 Production costs of "cents-off" store coupons for customers 730 Lemon syrup 16000 Replace products with expired dates upon customer complaint 35 Depreciation on plant and equipment 3500 Wages of workers who mix syrup 8200 Customer hotline 170 Freight-in on materials 1300 Total costs 1040 1500 19850 8200 4600 1005 440 205