1. Calculate the product cost per unit and gross margin for one pound of French Roast and one pound of Golden Roast assuming an activity-based costing system is used to allocate overhead.

Table 1 Estimated Costs per pound for French Roast and Golden Roast Product Lines French Roast Golden Roast Direct Materials 9.00 Direct Labor\" .48 *.04 direct labor hours per pound Table 2 Estimated Overhead Costs and Activities Cost Pool Cost Driver Estimated Activityr Estimated OH Costs Procurement Purchase Orders 2,500 orders $1,120,000 Machine Setups Number of Machine Setups 1,250 setups $386,000 Material Handling Number of Batches 625 batches $180,000 Roasting Roasting Hours 118,750 hours $2,090,000 Mixing Mixing Hours 40,000 hours $384,000 Packaging Packaging Hours 30,000 hours $240,000 Total Estimated Overhead $4,400,000 Table 3 Estimated Activity for French Roast and Golden Roast Product Lines French Roast Golden Roast Estimated Sales 100,000 pounds 5,000 pounds Roasting Hours {per 100 pounds} 1.88 hours 1.88 hours Mixing Hours {per 100 pounds} .63 hours Packaging Hours {per 100 pounds) .38 hours Batch Size 6,250 pounds 625 pounds Setups 2.50 per batch 2.50 per batch