Question
Oriole's Bakery makes a variety of home-style cookies for upscale restaurants in the Atlanta metropolitan area. The company's best-selling cookie is the double chocolate almond
Oriole's Bakery makes a variety of home-style cookies for upscale restaurants in the Atlanta metropolitan area. The company's best-selling cookie is the double chocolate almond supreme. Oriole's recipe requires 40 ounces of a commercial cookie mix, 5 ounces of milk chocolate, and 2 ounces of almonds per batch of cookies. The standard direct materials costs are $1.20 per pound of cookie mix, $8.00 per pound of milk chocolate, and $12.00 per pound of almonds. Each pound of cookies requires 1 minutes of direct labor in the mixing department and 4 minutes of direct labor in the baking department. The standard labor rates in those departments are $15.00 per direct labor hour (DLH) and $24.00 per DLH, respectively. Variable overhead is applied at a rate of $36.00 per DLH; fixed overhead is applied at a rate of $66.00 per DLH.
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