World Gourmet Coffee Company (WGCC) is a distributor and processor of different blends of coffee.

The company buys coffee beans from around the world and roasts, blends, and packages them for resale.

WGCC currently has 15 different coffees that it offers to gourmet shops in one-pound bags. The major

cost is raw materials; however, there is a substantial amount of manufacturing overhead in the predominantly

automated roasting and packing process. The company uses relatively little direct labor.

Some of the coffees are very popular and sell in large volumes, while a few of the newer blends

have very low volumes. WGCC prices its coffee at full product cost, including allocated overhead, plus

a markup of 30 percent. If prices for certain coffees are significantly higher than market, adjustments

are made. The company competes primarily on the quality of its products, but customers are priceconscious

as well.

Data for the 20x1 budget include manufacturing overhead of $3,000,000, which has been allocated

on the basis of each product