Coffee Bean Incorporated [CBI] processes and distributes high-quality coffee. CBI buys coffee beans from around the world and roasts, blends, and packages them for resale. Currently, the rm offers 2 coffees to gourmet shops in 'lpound bags. The major cost is direct materials; however, a substantial amount of factory overhead is incurred in the predominantly automated roasting and packing process. The company uses relatively little direct labor. CEI prices its coffee at full product cost, including allocated overhead, plus a markup of 30%. if its prices 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 $3,154,000, which has been allocated on the basis of each product's direct labor cost. The budgeted direct labor cost for the current year totals $600,000. The rm budgeted $6,000,000 for purchase and use of direct materials [mostly coffee beans]. The budgeted direct costs for 1-pound bags are as follows: Mona Loa Halaysian Direct materials 5 4.20 S 3.20 Direct labor 0.30 0.30 CEl'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 Driver Activity Cost Driver Consumption Budgeted Cost Purchasing Purchase orders 1,268 $ 634,000 Materials handling Setups 1,910 764,000 Quality control Batches 330 166,000 Roasting Roasting hours 97,200 972,000 Blending Blending hours 34,700 347,000 Packaging Packaging hours 27,100 271,000 Total factory overhead cost $ 3,154,000 Data regarding the current year's production for the Mona Loa and Malaysian lines follow. There is no beginning or ending direct materials inventory for either of these coffees. Mona Loa Malaysian Budgeted sales 100,000 pounds 2,000 pounds Batch size 10,000 pounds 500 pounds Setups 3 per batch 3 per batch Purchase order size 25,000 pounds 500 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 Coffee Bean has total practical capacity as noted in the table below, i.e. processing 1,620 purchase orders, 2,620 setups, etc. These are the levels of activity work that are sustainable. Practical Activity Capacity Purchasing 1, 620 Materials handling 2, 620 Quality control 1, 420 Roasting 102 , 200 Blending 38, 200 Packaging 32, 200 Required: 1. Determine the activity rates based on practical capacity and the cost of idle capacity for each activity. (Round "Usage %" and "Practical Capactity Rate" to 2 decimal places. For percentages .1234 = 12.34%.) Practical Activity Budgeted Budgeted Cost Usage Based Capacity at Usage % Practical Unused Idle Capacity Activity Rate Current Capacity Rate Capacity Cost Spending Purchasing 1,268 $ 634,000 1,620 Materials handling 1,910 $ 764,000 2,620 Quality control 830 $ 166,000 1,420 Roasting 97,200 972,000 102,200 Blending 34,700 347,000 38,200 Packaging 27,100 271,000 32,200 $ 3,154,000