Coffee Bean Inc. {CBI} processes and distributes a variety of coffee. CBI buys coffee beans from around the world and roasts, blends, and packages them for resale. Currently, the firm offers 15 coffees to gourmet shops in 1-pound bags. The major cost is direct materials; however, a substantial amount offactory overhead is incurred 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; a few of the newer brands have very low volumes. CBI prices its coffee at full product cost, including allocated overhead, plus a markup of 30%. If its prices for certain coffees are signicantly higher than the market, CBI lowers its prices. The company competes primarily on the quality of its products, but customers are price conscious as well. Data for the current budget include factory overhead of $3,700,000, which has been allocated on the basis of each product's direct labor cost. The budgeted direct labor cost for the current year totals $607,000. The rm budgeted $6,700,000 for purchase and use of direct materials [mostly coffee beans). The budgeted direct costs for 1-pound bags of two of the company's many products are as follows: Hone Loa Malaysian Direct materials $4.20 $3.20 Direct labor 0.30 0.30 ' CBl's controller, Mona Clin, believes that its current product costing system could be providing misleading cost information. She has developed this analysis of the current year's budgeted factory overhead costs: Budgeted Activity Cost Driver Activity Budgeted Coat Purchasing Purchase orders 1,223 $ 536,000 Materials handling Setups 1,010 T27,000 Quality control Batches T90 151,000 Roasting Roasting hours 96,000 968,000 Blending Blending hours 34,300 343,000 Packaging Packaging hours 26,100 267,000 Total factory overhead cost $ 3,042,000 Data regarding the current year's production ofjust two of its lines. Mona Loa and Malaysian, follow. There is no beginning or ending direct materials inventory for either of these coffees. Mona Lon Halaysian Budgeted sales 10?,000 pounds 2,070 pounds Batch size 10,100 pounds 570 pounds Setups 3 per hatch 3 per batch Purchase order size 25,100 pounds 570 pounds Roasting time 1 hour per 100 pounds 1 hour per 100 pounds Blending time 0.5 hour per 100 pounds 0.5 hour per 100 pounds Packaging time 0.1 hour per 100 pounds 0.1 hour per 100 pounds Required: 1. Using Coffee Bean Inc.'s current product costing system, 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 Mona Loa coffee and one pound of Malaysian coffee. 2. Using an activity-based costing approach, develop a new product cost for 1 pound of Mona Loa coffee and 1 pound of Malaysian coffee. Allocate all overhead costs to the 107,000 pounds of Mona Loa and the 2,070 pounds of Malaysian. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Using Coffee Bean Inc.'s current product costing system, determine the company's predetermined overhead rate using direct labor cost as the single cost driver. (Round your answer to 2 decimal places.) Predetermined factory overhead rate per direct-labor dollarReq 1A Req 1B Req 2 Using Coffee Bean Inc.'s current product costing system, determine the full product costs and selling prices of one pound of Mona Loa coffee and one pound of Malaysian coffee. (Round your answers to 2 decimal places.) Mona Loa Malaysian Product costs Budgeted selling price per poundReq 1A Req 1B Req 2 Using an activity-based costing approach, develop a new product cost for 1 pound of Mona Loa coffee and 1 pound of Malaysian coffee. Allocate all overhead costs to the 107,000 pounds of Mona Loa and the 2,070 pounds of Malaysian. (Round intermediate calculations to 2 decimal places.) Mona Loa Coffee Malaysian Coffee Direct unit costs: Direct materials Direct labor Indirect unit costs: Purchasing Material handling Quality control Roasting Blending