Question is in the pic.

Java Source, Inc. Java Source, Inc. (JSI) is a small, Michigan-based processor and distributor of a variety of blends of coffee. The company buys coffee beans from around the world and roasts, blends, and packages them for resale. JSI offers a large variety of different coffees that it sells to gourmet shops in one-pound bags. The major cost of the coffee is raw materials. However, the company's predominantly automated roasting, blending, and packing processes require a substantial amount of manufacturing overhead.~ Although the production process started out in the early 1990s as a largely labor-intensive operation, the gradual switch to automation meant that currently, the company uses relatively little direct labor. The different blends produced by JSI require varying amounts of time in the roasting and blending processes.~ The coffee industry in the US is very competitive, with large players in the market (such as Starbucks and Green Mountain Coffee Roasters) marketing and selling several varieties of coffee beans. To differentiate itself from the competition, JSI specializes in many unique luxury blends of coffee. Some of JSI's coffees are very popular and sell in large volumes, while a few of the newer blends sell in very low volumes. JSI prices its coffees at manufacturing cost plus a markup of 25%; however, because consumers of coffee beans are quite price-sensitive, JSI occasionally makes some adjustments to its cost- plus pricing scheme to keep the company's prices competitive. For the coming year, JSI's budget includes estimated manufacturing overhead cost of $2,200,000.~ JSI assigns manufacturing overhead to products on the basis of direct labor-hours. The expected direct labor cost totals $600,000, which represents 50,000 hours of direct labor time. Based on the sales budget and expected raw materials costs, the company expects to purchase and use $5,000,000 of raw materials (mostly coffee beans) during the year.~ The expected costs for direct materials and direct labor for one-pound bags of two of the company's coffee products appear below: Kenya Dark Viet Select Direct materials...... $4.504 $2.90( Direct labor (0.02 hours per bag) $0.24( $0.24