Coffee Bean, Inc. (CBI), is a processor and distributor of a variety of blends of coffee. The company buys coffee beans from around the world and roasts, blends, and packages them for resale. CBI offers a large variety of different coffees that it sells to gourmet shops in one-pound bags. The major cost of the coffee is raw materials. However, the company's predominantly automated roasting, blending, and packing processes require a substantial amount of manufacturing overhead. The company uses relatively little direct labor. Some of CBI's coffees are very popular and sell in large volumes, while a few of the newer blends sell in very low volumes. For the coming year, CBI's budget includes estimated manufacturing overhead cost of $2,898,000. CBI assigns manufacturing overhead to products on the basis of direct labor-hours. The expected direct labor cost totals $644,000, which represents 46,000 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. Direct materials Direct labor (0.025 hours per bag) Mona Loa Malaysian $ 3.80 $ 2.80 $ 0.35 $ 0.35 CBI'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: Activity Cost Pool Activity Measure Purchasing Purchase orders Material handling Number of setups Quality control Number of batches Roasting Roasting hours Blending Blending hours Packaging Packaging hours Total manufacturing overhead cost Expected Activity for Expected Cost the Year for the Year 1,670 orders $ 434,200 1,760 setups 633, 600 560 batches 112,000 95,700 roasting hours 1,148,400 33,100 blending hours 331,000 23,880 packaging hours 238,800 $ 2,898,000 Data regarding the expected production of Mona Loa and Malaysian coffee are presented below. There will be no raw materials inventory for either of these coffees at the beginning of the year. Expected sales Batch size Setups Purchase order size Roasting time per 100 pounds Blending time per 100 pounds Packaging time per 100 pounds Mona Loa 64,000 pounds 16,000 pounds 2 per batch 16,000 pounds 1 roasting hours 0.5 blending hours 0.1 packaging hours Malaysian 1,200 pounds 400 pounds 2 per batch 400 pounds 1 roasting hours 0.5 blending hours 0.1 packaging hours Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B Req 2c Using activity-based costing as the basis for assigning manufacturing overhead cost to products, determine the total amount of manufacturing overhead cost assigned to the Mona Loa coffee and to the Malaysian coffee for the year. (Do not round intermediate calculations. Round your answers to the nearest dollar amount.) Mona Loa Malaysian Total manufacturing overhead cost Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B Req 2c Using activity-based costing as the basis for assigning manufacturing overhead cost to products, compute the amount of manufacturing overhead cost per pound of the Mona Loa coffee and the Malaysian coffee. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Mona Loa Malaysian Manufacturing overhead cost per pound Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Reg 2A Req 2B Reg 2C Using activity-based costing as the basis for assigning manufacturing overhead cost to products, determine the unit product cost of one pound of the Mona Loa coffee and one pound of the Malaysian coffee. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Mona Loa Malaysian Total unit product cost
