3 14.32 points eBook References World Gourmet Coffee Company (WGCC) is a distributor and processor of different blends of coffee. The company buys coffee beans from around the world and roasts, blends, and packages them for resale. WGCC currently has 15 different coffees that it offers to gourmet shops in one-pound bags. The major cost is raw materials; however, there is a substantial amount of manufacturing overhead in the predominantly automated roasting and packing process. The company uses relatively little direct labor. Some of the coffees are very popular and sell in large volumes, while a few of the newer blends have very low volumes. WGCC prices its coffee at full product cost, including allocated overhead, plus a markup of 35 percent. If prices for certain coffees are significantly higher than market, adjustments are made. The company competes primarily on the quality of its products, but customers are price- conscious as well. Data for the 20x1 budget include manufacturing overhead of $21,285,120, which has been allocated on the basis of each product's direct-labor cost. The budgeted direct-labor cost for 20x1 totals $2,128,512. Based on the sales budget and raw-material budget, purchases and use of raw materials (mostly coffee beans) will total $7,400,000. The expected prime costs for one-pound bags of two of the company's products are as follows: Check my wor Direct material Direct labor Kona $2.90 0.80 Malaysian $3.90 0.80 WGCC's controller believes the traditional product-costing system may be providing misleading cost information. She has developed an analysis of the 20x1 budgeted manufacturing overhead costs shown in the following chart." Activity Purchasing Cost Driver Purchase orders Budgeted Activity 2,716 Material handling Setups 4,248 Quality control Batches 1,760 Budgeted Cost $ 3,585,120 4,409,600 945,600 Roasting Roasting hours 208,200 7,495,2001 Blending Blending hours 73,600 2,649,600. Packaging Packaging hours 60,000 2,160,000 Total manufacturing-overhead cost $21,285,120 Data regarding the 20x1 production of Kona and Malaysian coffee are shown in the following table. There will be no raw-material inventory for either of these coffees at the beginning of the year. 3 Batch size Kona Budgeted sales 5,200 lb. 1,300 lb. Setups 3 per batch. Purchase order size: 1,300 lb. 14.32 Roasting time 1 hr. per 100 lb. points Blending time 0.5 hr. per 100 lb. Packaging time 0.1 hr. per 100 lb. Required: eBook 1. Using WGCC's current product-costing system: Malaysian 116,000 lb. 23,200 lb. 3 per batch 58,000 lb. 1 hr. per 100 lb. 0.5 hr. per 100 lb. 0.1 hr. per 100 lb. References a. Determine the company's predetermined overhead rate using direct-labor cost as the single cost driver. b. Determine the full product costs and selling prices of one pound of Kona coffee and one pound of Malaysian coffee. 2. Develop a new product cost, using an activity-based costing approach, for one pound of Kona coffee and one pound of Malaysiam coffee. Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 2 Determine the company's predetermined overhead rate using direct-labor cost as the single cost driver. Overhead rate per direct-labor dollar Res 1A Req 18 > Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Determine the full product costs and selling prices of one pound of Kona coffee and one pound of Malaysian coffee. (Round your intermediate calculations and final answers to 2 decimal places.) Full product cost Selling price Kona Malaysian per pound per pound per pound per pound Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 2 Develop a new product cost, using an activity-based costing approach, for one pound of Kona coffee and one pound of Malaysian coffee. (Round your intermediate calculations and final answers to 2 decimal places.) Kona coffee Malaysian coffee New Product Cost per pound per pound Req 18