Tom Hirton Coffee process and distribute a variety of coffee blends. It buys coffee beans from various locations around the world and roasts, blends and packages the coffee in one-kilogram bags. The company currently produces fifteen different blends that are sold to gourmet shops across the country. Some blends are extremely popular while some newer blends sell in relatively low volumes. The major cost is the raw beans, although the company incurs substantial overhead costs in the highly automated roasting and packaging process. The company has no significant direct labour. The company prices the coffee at its budgeted cost (including allocated overhead) plus a mark-up of 30%. The company competes primarily on the quality of its product; however customers are somewhat price conscious.