orld Gourmet Coffee Company (WGCC) is a distributor and processor of different blends of coffee. The company buys coffee beans rom around the world and roasts, blends, and packages them for resale. WGCC currently has 15 different coffees that it offers to ourmet shops in onepound bags. The major cost is raw materials; however, there is a substantial amount of manufacturing overhead n the predominantly automated roasting and packing process. The company uses relatively little direct labor. ome of the coffees are very popular and sell in large volumes, while a few ofthe newer blends have very low volumes. WGCC prices ts coffee at full product cost, including allocated overhead, plus a markup of 20 percent. If prices for certain coffees are significantly igher than market, adjustments are made. The company competes primarily on the quality of its products, but customers are price onscious as well. ata for the 20x1 budget include manufacturing overhead of $19,419,360, which has been allocated on the basis of each product's irectlabor cost. The budgeted directlabor cost for 20x1 totals $1,941,936. Based on the sales budget and rawmaterial budget, urchases and use of raw materials (mostly coffee beans) will total $7,100,000. he expected prime costs for onepound bags of two ofthe company's products are as follows: Kona Malaysian Direct material $2.60 $3.60 Direct labor 0 . 50 0 . 50 GCC's controller believes the traditional product-costing system may be providing misleading cost information. She has developed n analvsis of the 20x1 budgeted manufacturinooverhead costs shown in the followino chart. WGCC's controller believes the traditional productcosting system may be providing misleading cost information. She has developed an analysis of the 20x1 budgeted manufacturing-overhead costs shown in the following chart. Budgeted Budgeted Activity Cost Driver Activity Cost Purchasing Purchase orders 2,641 $ 3,327,660 Material handling Setups 4,120 4,099,400 Quality control Batches 1,700 901,000 Roasting Roasting hours 205,200 6,771,600 Blending Blending hours 72,400 2,389,200 Packaging Packaging hours 58,500 1,930,500 Total manufacturingoverhead cost $19,419,350 Data regarding the 20x1 production of Kona and Malaysian coffee are shown in the following table. There will be no rawmaterial inventory for either ofthese coffees at the beginning of the year. Kona Malaysian Budgeted sales 4,6001b. 113,0001b. Batch size 1,1501b. 22,6001b. Setups 3per batch 3per batch Purchase order size 1,1501b. 56,5001b. Roasting time 1hr. per 100 lb. 1hr. 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 product cost, using an activity-based costing approach, for one pound of Kona coffee and one pound of Malaysian coffee. X Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 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 $ 8.10 per $ pound 9.10 per pound Sellina price $ 9.70 X per $ 10.92 Iner pound Prev