just need #2 please
World Gourmet Coffee Company (WGCC) is a distributor and processor of different blends of coffee. The company buys coffee beans from around the world and roasts, blends, and packages them for resale. WGCC currently has 15 different coffees that it offers to gourmet shops in one-pound bags. The major cost is raw materials; however, there is a substantial amount of manufacturing overhead 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, while a few of the newer blends have very low volumes. WGCC prices its coffee at full product cost, including allocated overhead, plus a markup of 35 percent. If prices for certain coffees are significantly higher than market, adjustments are made. The company competes primarily on the quality of its products, but customers are price- conscious as wel. Data for the 20x1 budget include manufacturing overhead of $21,285,120, which has been allocated on the basis of each product's direct-labor cost. The budgeted direct-labor cost for 20x1 totals $2,128,512. Based on the sales budget and raw-material budget, purchases and use of raw materials (mostly coffee beans) will total $7,400,000. Kona Direct material Direct labor $2.90 0.80 Malaysian $3.90 0.80 WGCC'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. ETT Budgeted Activity 2,716 4,240 1,760 208,200 73,600 Activity Purchasing Material handling Quality control Roasting Blending Packaging Total manufacturing- overhead cost Cost Driver Purchase orders Setups Batches Budgeted Cost 3,585,120 4,409,600 985,600 7,495,200 2,649,600 2,160,000 Roasting hours Blending hours Packaging hours 60,000 $21,285,120 Data regarding the 20x1 production of Kona and Malaysian coffee inventory for either of these coffees at the beginning of the year. are shown in the following table. There will be no raw-material Kona Budgeted sales Batch size Setups Purchase order size Roasting time Blending time Packaging tine 5,200 lb 1,300 lb. 3 per batch 1,300 lb. lhr. per 100 lb. 0.5hr. per 100 lb. 0.1hr. per 100 lb. Malaysian 116,000 lb. 23,200 lb. 3 per batch 58,000 1b. 1 hr. per 100 lb. 0.5 hr. per 100 lb. 0.1 hr. per 100 lb. Required: 1. Using WGCC'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 coffee. product cost, using an activity-based costing approach, for one pound of Kona coffee and one pound of Malaysian Required 1A Required 18 Required 2 Determine the company's predetermined overhead rate using direct-labor cost as the single cost driver. Overhead rate 10 per direct-labor dollar bo m Complete this questlon by entering your answers In the tabs below. Required 1A Required 1B Required 2 Determine the full product costs and selling prices of one pound of Kona coffee and one pound of Malaysian coffee. (Round your intermediate calculations and final answers to 2 decimal places.) Kona Malaysian Full product cost per pound Selling price per pound 11.70 per pound S 12.70 per pound 15.80 per pound S 17.15 per pound Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2 Develop a new product cost, using an activity-based costing approach, for one pound of Kona coffee and one pound of Malaysian coffee. (Round your intermediate calculations and final answers to 2 decimal places.) New Product Cost Kona coffee per pound Malaysian coffee per pound Required 18
