direct materials $4.90 $3.90

direct labor (0.025 hours per bag ) $.25 $.25

cer'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 Expected Activity for Expected cost Activity Cost Pot Activity Beasure the Year for the Year Purchasing Purchase orders 1,780 orders $ 658,600 Material handling Humber of setups 1.870 setups 178,900 Quality control Number of batches 670 batches 207,700 Roasting Itoasting hours 96,000 ruasting hours 1,064,800 Blending Blending hours 34,200 blending hours 376,200 Packaging Packaging hours 23,380 packaging hours 23.00 Total manufacturing overhead cost $3,420,000 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 Hatch size tups Purchase order site Roasting time per 100 pounds Blending time per 100 pounds Packaging time per 100 pounds Mona Low 135,000 pounds 15,000 pounds 4 per 27,000 pounds 1 roasting hours 0.5 blending hours 0.1 packaging hours Mes 10 2,400 pounds 600 pounds 4 per batch 600 pounds 1 roasting hours 0.5 blending hours 0.1 packaging hours Required: 1. Using direct labor-hours as the base for assigning manufacturing overhead cost to products, do the following: a. Determine the predetermined overhead rate that will be used during the year b. Determine the unit product cost of one pound of the Mona Loa coffee and one pound of the Malaysian coffee 2. Using activity based costing as the basis for assigning manufacturing overhead cost to products.do the following a. Determine the total amount of manufacturing overhead cost assigned to the Mona Loa coffee and to the Malaysian coffee for the year b. Using the data developed in part 2) above, compute the amount of manufacturing overhead cost per pound of the Mona Loa cer'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 Expected Activity for Expected cost Activity Cost Pot Activity Beasure the Year for the Year Purchasing Purchase orders 1,780 orders $ 658,600 Material handling Humber of setups 1.870 setups 178,900 Quality control Number of batches 670 batches 207,700 Roasting Itoasting hours 96,000 ruasting hours 1,064,800 Blending Blending hours 34,200 blending hours 376,200 Packaging Packaging hours 23,380 packaging hours 23.00 Total manufacturing overhead cost $3,420,000 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 Hatch size tups Purchase order site Roasting time per 100 pounds Blending time per 100 pounds Packaging time per 100 pounds Mona Low 135,000 pounds 15,000 pounds 4 per 27,000 pounds 1 roasting hours 0.5 blending hours 0.1 packaging hours Mes 10 2,400 pounds 600 pounds 4 per batch 600 pounds 1 roasting hours 0.5 blending hours 0.1 packaging hours Required: 1. Using direct labor-hours as the base for assigning manufacturing overhead cost to products, do the following: a. Determine the predetermined overhead rate that will be used during the year b. Determine the unit product cost of one pound of the Mona Loa coffee and one pound of the Malaysian coffee 2. Using activity based costing as the basis for assigning manufacturing overhead cost to products.do the following a. Determine the total amount of manufacturing overhead cost assigned to the Mona Loa coffee and to the Malaysian coffee for the year b. Using the data developed in part 2) above, compute the amount of manufacturing overhead cost per pound of the Mona Loa