Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

sorry there are a lot of words, how would I solve this question Coffee Bean, Inc. (CBI), is a processor and distributor of a variety

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

sorry there are a lot of words, how would I solve this question

Coffee Bean, Inc. (CBI), is a 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. CBI 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. The company uses relatively little direct labor. Some of CBI's coffees are very popular and sell in large volumes, while a few of the newer blends sell in very low volumes. For the coming year, CBI's budget includes estimated manufacturing overhead cost of $2,700,000. CBI assigns manufacturing overhead to products on the basis of direct labor-hours. The expected direct labor cost totals $540,000, which represents 45,000 hours of direct labor time. The expected costs for direct materials and direct labor for one-pound bags of two of the company's coffee products appear below. Direct materials Direct labor (0.025 hours per bag) Mona Loa $ 3.70 $ 0.30 Malaysian $ 2.70 $ 0.30 CBI's controller believes that the company's traditional costing system may be providing misleading cost information. To determine whether or not this is correct, the controller has prepared an analysis of the year's expected manufacturing overhead costs, as shown in the following table: Activity Cost Pool Activity Measure Purchasing Purchase orders Material handling Number of setups Quality control Number of batches Roasting Roasting hours Blending Blending hours Packaging Packaging hours Total manufacturing overhead cost Expected Activity for the Year 1,660 orders 1,750 setups 550 batches 95,600 roasting hours 33,000 blending hours 21,600 packaging hours Expected Cost for the Year $ 415,000 612,500 104,500 956,000 396,000 216,000 $ 2,700,000 Data regarding the expected production of Mona Loa and Malaysian coffee are presented below. There will be no raw materials inventory for either of these coffees at the beginning of the year. Malaysian 2,000 pounds 500 pounds 3 per batch Mona Loa 75,000 pounds 15,000 pounds 3 per batch Expected sales Batch size Setups Roasting Roasting hours Blending Blending hours Packaging Packaging hours Total manufacturing overhead cost 95,600 roasting hours 33,000 blending hours 21,600 packaging hours 956,000 396,000 216,000 $2,700,000 Data regarding the expected production of Mona Loa and Malaysian coffee are presented below. There will be no raw materials inventory for either of these coffees at the beginning of the year. Expected sales Batch size Setups Purchase order size Roasting time per 100 pounds Blending time per 100 pounds Packaging time per 100 pounds Mona Loa 75,000 pounds 15,000 pounds 3 per batch 15,000 pounds 1 roasting hours 0.5 blending hours 0.1 packaging hours Malaysian 2,000 pounds 500 pounds 3 per batch 500 pounds 1 roasting hours 0.5 blending hours 0.1 packaging hours Required: 1. Using direct labor-hours as the base for assigning manufacturing overhead cost to products, do the following: a. Determine the predetermined overhead rate that will be used during the year. b. Determine the unit product cost of one pound of the Mona Loa coffee and one pound of the Malaysian coffee. 2. Using activity-based costing as the basis for assigning manufacturing overhead cost to products, do the following: a. Determine the total amount of manufacturing overhead cost assigned to the Mona Loa coffee and to the Malaysian coffee for the year. b. Using the data developed in part (2a) above, compute the amount of manufacturing overhead cost per pound of the Mona Loa coffee and the Malaysian coffee. c. Determine the unit product cost of one pound of the Mona Loa coffee and one pound of the Malaysian coffee. Complete this question by entering your answers in the tabs below. Req 2B Reg 20 Req 2A Req 1A Req 1B Using direct labor-hours as the base for assigning manufacturing overhead cost to products, determine the predetermined overhead rate that will ho riced during the waar 4 of 5 Required: 1. Using direct labor-hours as the base for assigning manufacturing overhead cost to products, do the following: a. Determine the predetermined overhead rate that will be used during the year. b. Determine the unit product cost of one pound of the Mona Loa coffee and one pound of the Malaysian coffee. 2. Using activity-based costing as the basis for assigning manufacturing overhead cost to products, do the followin a. Determine the total amount of manufacturing overhead cost assigned to the Mona Loa coffee and to the Malays year. b. Using the data developed in part (2a) above, compute the amount of manufacturing overhead cost per pound of coffee and the Malaysian coffee. c. Determine the unit product cost of one pound of the Mona Loa coffee and one pound of the Malaysian coffee. Complete this question by entering your answers in the tabs below. Reg 1B Req 1A Reg 2A Reg 2B Reg 20 Using direct labor-hours as the base for assigning manufacturing overhead cost to products, determine the predetermined overhead rate that will be used during the year. per DLH Predetermined overhead rate Req 1B CO IC b. Using the data developed in part (2a) above, compute the amount of manufacturing overhead cost per pound of the Mona La coffee and the Malaysian coffee. c. Determine the unit product cost of one pound of the Mona Loa coffee and one pound of the Malaysian coffee. Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Req 2A Reg 2B Reg 20 Using direct labor-hours as the base for assigning manufacturing overhead cost to products, determine the unit product cost of one pound of the Mona Loa coffee and one pound of the Malaysian coffee. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Mona Loa Malaysian Total unit product cost Req 1A Req 2A > Packaging time per 100 pounds + 0.1 packaging hours 0.1 packaging hours Required: 1. Using direct labor-hours as the base for assigning manufacturing overhead cost to products, do the following: a. Determine the predetermined overhead rate that will be used during the year. b. Determine the unit product cost of one pound of the Mona Loa coffee and one pound of the Malaysian coffee. 2. Using activity-based costing as the basis for assigning manufacturing overhead cost to products, do the followir a. Determine the total amount of manufacturing overhead cost assigned to the Mona Loa coffee and to the Malays year. b. Using the data developed in part (2a) above, compute the amount of manufacturing overhead cost per pound of coffee and the Malaysian coffee. c. Determine the unit product cost of one pound of the Mona Loa coffee and one pound of the Malaysian coffee. Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Red 2A Reg 2B Reg 20 Using activity-based costing as the basis for assigning manufacturing overhead cost to products, determine the total amou of manufacturing overhead cost assigned to the Mona Loa coffee and to the Malaysian coffee for the year. (Do not round intermediate calculations. Round your answers to the nearest dollar amount.) Mona Loa Malaysian Total manufacturing overhead cost Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B Req 20 Using activity-based costing as the basis for assigning manufacturing overhead cost to products, compute the am manufacturing overhead cost per pound of the Mona Loa coffee and the Malaysian coffee. (Do not round intermed calculations. Round your answers to 2 decimal places.) Mona Loa Malaysian Manufacturing overhead cost per pound c. Determine the unit product cost of one pound of the Mona Loa coffee and one pound of the Malaysian coffee. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B Reg 20 Using activity-based costing as the basis for assigning manufacturing overhead cost to products, determine the unit prode cost of one pound of the Mona Loa coffee and one pound of the Malaysian coffee. (Do not round intermediate calculations Round your answers to 2 decimal places.) Mona Loa Malaysian Total unit product cost

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Auditing Real Issues And Cases

Authors: Michael C. Knapp

6th Edition

0324303254, 9780324303254

More Books

Students also viewed these Accounting questions