Business, 13.10.2020 03:01 logan541972
ZigZag 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. ZigZag Cola incurs the following costs (in thousands):
Plant janitors' wages $ 900
Delivery truck drivers' wages $ 275
Payment for new recipe $ 1,300
Depreciation on delivery trucks $ 175
Plant utilities $ 650
Lime flavoring $ 1,180
Rearranging plant layout $ 1,600
Bottles $ 1,040
Salt 50
Sales commissions $ 325
Production costs of "cents-off' store coupons for customers $ 770
Lemon syrup $ 16,000
Replace products with expired dates upon customer complaint $ 70
Depreciation on plant and equipment $ 2,700
Wages of workers who mix syrup $ 7,800
Customer hotline $ 180
Freight-in on materials $ 2,000
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.
Answers: 3
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ZigZag Cola produces a lemon-lime soda. The production process starts with workers mixing the lemon...
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