Sheffields Nut House is a processor and distributor of a variety of different nuts. The company buys nuts from around the world and roasts, seasons, and packages them for resale. Sheffields Nut House currently offers 18 different types of nuts in one-pound bags through catalogs and gourmet shops. The companys major cost is that of the raw nuts; however, the predominantly automated roasting and packing processes consume a substantial amount of manufacturing overhead cost. The company uses relatively little direct labor. Some of Sheffields nuts are very popular and sell in large volumes, but a few of the newer types sell in very low sales volumes. Sheffields prices its nuts at cost (including overhead) plus a markup of 40%. If the resulting prices of certain nuts are significantly higher than the market price, adjustments are made. Although the company competes primarily on the quality of its products, customers are price conscious. Data for the annual budget include manufacturing overhead of $5,834,710, allocated on the basis of each products direct labor cost. The annual budgeted direct labor cost totals $1,239,000. Based on the sales budget and raw materials standards, purchases and use of raw materials are expected to total $9,074,000 for the year. The unit costs of a one-pound bag of two of the companys products follows.
Please help me solve the blanks. Thank you so much.
*Problem 7-25 Sheffield's Nut House is a processor and distributor of a variety of different nuts. The company buys nuts from around the world and roasts, seasons, and packages them for resale. Sheffield's Nut House currently offers 18 different types of nuts in one-pound bags through catalogs and gourmet shops. The company's major cost is that of the raw nuts; however, the predominantly automated roasting and packing processes consume a substantial amount of manufacturing overhead cost. The company uses relatively little direct labor Some of Sheffield's nuts are very popular and sell in large volumes, but a few of the newer types sell in very low sales volumes. Sheffield's prices its nuts at cost (including overhead) plus a markup of 40%. If the resulting prices of certain nuts are significantly higher than the market price, adjustments are made. Although the company competes primarily on the quality of its products, customers are price conscious. Data for the annual budget include manufacturing overhead of $5,834,710, allocated on the basis of each product's direct labor cost. The annual budgeted direct labor cost totals $1,239,000. Based on the sales budget and raw materials standards, purchases and use of raw materials are expected to total $9,074,000 for the year The unit costs of a one-pound bag of two of the company's products follows. Cashews Chestnuts Raw materials Direct labor $4.30 0.33 $3.12 0.33 Sheffield's controller believes that the traditional costing system may be providing misleading cost information, so she has developed the following analysis of the annual budgeted manufacturing costs. Budgeted Budgeted Activity Cost Driver Purchase orders Number of setups Number of batches Roasting hours Seasoning hours Packaging hours Activity 11,520 1,790 610 96,220 33,010 25,740 Cost Purchasing Material handling Quality control Roasting Seasoning Packaging $1,209,600 1,521,500 314,150 1,731,960 594,180 463,320 $5,834,710 Total manufacturing overhead cost Data regarding the annual production of cashews and chestnuts follow. All raw materials purchased during the period are processed and all nuts produced are sold within the period Cashews Chestnuts Expected sales Batch size Setups Purchase order size Roasting time Seasoning time Packaging time 132,300 lbs. 10,000 lbs. 3 per batch 2,500 lbs. 1.20 hour/100 lbs. 0.3 hour/100 lbs. 0.1 hour/100 lbs. 2,000 lbs. 1,000 lbs. 3 per batch 50 lbs. 1.2 hour/100 lbs. 0.3 hour/100 lbs. 0.1 hour/100 lbs. Using the current costing system, calculate the cost and selling price of one pound of cashews and one pound of chestnuts. (Round predetermined overhead rate to 0 decimal places, e.g. 25% and final answers to 2 decimal places, e.g. 15.25.) Cashews Chestnuts lb. Cost lb. Selling Price Calculate ABC rates. Cost Pool Activity Rate Material handling $ Quality control Roasting Seasoning /purchase order /setup batch /roasting hour /seasoning hour /packaging hour Packaging Using an activity-based costing approach and the information provided, calculate the cost and selling price of one pound of cashews and one pound of chestnuts. (Round all rates and final answers to 2 decmial places, e.g. 15.25.) Cashews Chestnuts lb. Cost Selling Price
