Activity Cost Pool Expected Activity for the expected cost Activity Measure Year Purchasing for the Year Purchase orders 1,710 orders Material handling $ 495,900 Number of setups 1,830 setups Quality control 695,400 Number of batches 570 batches Roasting 136,800 Roasting hours 95,800 roasting hours 1,149,600 Blending Blending hours 33,900 blending hours 339,000 Packaging Packaging hours 26,200 packaging hours 288 289 Total manufacturing overhead cost $ 3,184,900 Data regarding the expected production and sales of Kenya Dark and Viet Select coffee are presented below. Kenya Dark Viet Select Expected production and sales 105,000 pounds 3,000 pounds Batch size 10,500 pounds 600 pounds Setups 2 per batch 2 per batch Purchase order size 21,800 pounds 600 pounds Roasting time per 180 pounds 1.5 roasting hours 1.5 roasting hours Blending time per 100 pounds 0.5 blending hours 0.5 blending hours Packaging time per 100 pounds 0.3 packaging hours 0.3 packaging hours Required: 1. Using direct labor-hours as the manufacturing overhead cost allocation base, do the following: a. Determine the plantwide predetermined overhead rate that will be used during the year. b. Determine the unit product cost of one pound of Kenya Dark coffee and one pound of Viet Select coffee. 2. Using the activity-based absorption costing approach, do the following: a. Determine the total amount of manufacturing overhead cost assigned to Kenya Dark coffee and to Viet Select coffee for the year. b. Using the data developed in (2) above, compute the amount of manufacturing overhead cost per pound of Kenya Dark coffee and Viet Select coffee. c. Determine the unit product cost of one pound of Kenya Dark coffee and one pound of Viet Select coffee. Java Source, Incorporated. (JS) buys coffee beans from around the world and roasts, blends, and packages them for resale. Some of JSI's coffees are very popular and sell in large volumes, while a few of the newer blends sell in very low volumes. JSI prices its coffees at manufacturing cost plus a markup of 25% For the coming year, JSI's budget includes estimated manufacturing overhead cost of $3,104,900. JSI assigns manufacturing overhead to products on the basis of direct labor-hours. The expected direct labor cost totals $600,000, which represents 50,000 hours of direct labor time. The expected costs for direct materials and direct labor for one-pound bags of two of the company's coffee products appear below. Kenya Dark Viet Select Direct materials $ 4.20 $ 3.20 Direct labor (0.030 hours per bag) $ 0.36 $ 0.36 JSI's controller believes that the company's traditional costing system may be providing misleading cost information. To determine whether or not this is correct, the controller has prepared an analysis of the year's expected manufacturing overhead costs, as shown in the following table