Chicago$-$based Intelligentsia $($

intelligentsiacoffee.com$)$ buys coffee beans from around the world and roasts, blends, and packages them for resale. The major cost is direct materials; however, Intelligentsia incurs substantial manufacturing overhead due to the automated roasting and packing process. Intelligentsia uses relatively little direct labor.

Some of Intelligentsia's coffees are very popular and sell in large volumes, where as a few of the newer blends such as Summer Solstice sell in very low volumes. Intelligentsia prices its coffee at budgeted cost, including allocated overhead, plus a markup on cost of $30\%.$

Data for the $2023$ budget include manufacturing overhead of $$3000000,$ which has been allocated on the basis of each product's budgeted direct$-$labor cost. The budgeted direct$-$labor cost for $2023$ totals $$600000.$ Purchases and use of materials $($primarily coffee beans$)$ are budgeted to total $$6000000.$

The budgeted direct costs for one$-$pound bags of two of the company's products are:

Budgeted Direct Costs for One$-$Pound

$\backslash$table$[[$Bags$,,],[,\backslash$table$[[$Mauna$],[$Loa$]],\backslash$table$[[$Summer$],[$Solstice$]]],[\backslash$table$[[$Direct$],[$materials$]],$$$4\mathrm{.}20,$$$3\mathrm{.}20$