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Java Source, Incorporated, ( JSI ) roasts, blends, and packages coffee beans for resale. Some of JSI's coffees sell in large volumes, while some newer
Java Source, Incorporated, JSI roasts, blends, and packages coffee beans for resale. Some of JSI's coffees sell in large volumes,
while some newer blends sell in very low volumes. JSI prices its coffees at manufacturing cost plus a markup of
For next year, JSI's budget includes estimated manufacturing overhead cost of $ JSI allocates manufacturing overhead to
products using direct laborhours. The expected direct labor cost totals $ which represents hours of direct labor time.
The expected direct materials and direct labor costs for onepound bags of two of the company's coffee blends appear below.
JSI's controller believes the company's traditional costing system may be providing misleading cost information; therefore, he
gathered the following activitybased cost information:
Data regarding the expected production and sales of Kenya Dark and Viet Select coffee are presented below.
Required:
Using direct laborhours as the manufacturing overhead cost allocation base:
a Calculate the plantwide predetermined overhead rate.
b Calculate the unit product cost of one pound of Kenya Dark and one pound of Viet Select.
Using the activitybased absorption costing approach:
a Calculate the total manufacturing overhead cost allocated to Kenya Dark and Viet Select.
b Using the data developed in a above, compute Kenya Dark's and Viet Select's manufacturing overhead cost per pound.
c Calculate the unit product cost of one pound of Kenya Dark and one pound of Viet Select.
Complete this question by entering your answers in the tabs below.
Using direct laborhours as the manufacturing overhead cost allocation base, calculate the plantwide predetermined overhead
rate.
Note: Round your answer to decimal places.
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