Question
Data for the 20times 1 budget include manufacturing overhead of $15,289,920 , which has been allocated on the basis of each product's direct-labor cost. The
Data for the
20\\\\times 1
budget include manufacturing overhead of
$15,289,920
, which has been allocated on the basis of each product's\ direct-labor cost. The budgeted direct-labor cost for
20\\\\times 1
totals
$1,528,992
. Based on the sales budget and raw-material budget,\ purchases and use of raw materials (mostly coffee beans) will total
$6,400,000
.\ The expected prime costs for one-pound bags of two of the company's products are as follows:\ GGCC's controller believes the traditional product-costing system may be providing misleading cost information. She has developed\ an analysis of the 20x1 budgeted manufacturing-overhead costs shown in the following chart.\ Data regarding the
20\\\\times 1
production of Kona and Malaysian coffee are shown in the following table. There will be no raw-material\ inventory for either of these coffees at the beginning of the year.\ Required:\ Using GGCC'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 Kona coffee and one pound of Malaysian coffee.\ Develop a new product cost, using an activity-based costing approach, for one pound of Kona coffee and one pound of Malaysian\ coffee.
Data for the 201 budget include manufacturing overhead of $15,289,920, which has been allocated on the basis of each product direct-labor cost. The budgeted direct-labor cost for 201 totals $1,528,992. Based on the sales budget and raw-material budget, purchases and use of raw materials (mostly coffee beans) will total $6,400,000. The expected prime costs for one-pound bags of two of the company's products are as follows: GGCC's controller believes the traditional product-costing system may be providing misleading cost information. She has developed an analysis of the 201 budgeted manufacturing-overhead costs shown in the following chart. Data regarding the 201 production of Kona and Malaysian coffee are shown in the following table. There will be no raw-material inventory for either of these coffees at the beginning of the year. Required: 1. Using GGCC'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 Kona coffee and one pound of Malaysian coffee. 2. Develop a new product cost, using an activity-based costing approach, for one pound of Kona coffee and one pound of Malaysian coffee
Data for the
20\\\\times 1
budget include manufacturing overhead of
$15,289,920
, which has been allocated on the basis of each product's\ direct-labor cost. The budgeted direct-labor cost for
20\\\\times 1
totals
$1,528,992
. Based on the sales budget and raw-material budget,\ purchases and use of raw materials (mostly coffee beans) will total
$6,400,000
.\ The expected prime costs for one-pound bags of two of the company's products are as follows:\ GGCC's controller believes the traditional product-costing system may be providing misleading cost information. She has developed\ an analysis of the 20x1 budgeted manufacturing-overhead costs shown in the following chart.\ Data regarding the
20\\\\times 1
production of Kona and Malaysian coffee are shown in the following table. There will be no raw-material\ inventory for either of these coffees at the beginning of the year.\ Required:\ Using GGCC'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 Kona coffee and one pound of Malaysian coffee.\ Develop a new product cost, using an activity-based costing approach, for one pound of Kona coffee and one pound of Malaysian\ coffee.
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