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 25 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 price-conscious as well. Data for the 20x1 budget include manufacturing overhead of $20,034,880, which has been allocated on the basis of each products direct-labor cost. The budgeted direct-labor cost for 20x1 totals $2,003,488. Based on the sales budget and raw-material budget, purchases and use of raw materials (mostly coffee beans) will total $7,200,000. The expected prime costs for one-pound bags of two of the companys products are as follows:

3 Data for the 20x1 budget include manufacturing overhead of $20.034.880, which has been allocated on the basis of each product's direct-labor cost. The budgeted direct-labor cost for 20x1 totals $2.003.488. Based on the sales budget and raw-material budget. purchases and use of raw materials (mostly coffee beans) will total $7.200.000 The expected prime costs for one-pound bags of two of the company's products are as follows: 6.25 points Direct material Direct labor Kona $2.70 0.60 Malaysian $3.79 @.60 Skipped eBook WGCC's controller believes the traditional product-costing system may be providing misleading cost information. She has developed an analysis of the 20x1 budgeted manufacturing-overhead costs shown in the following chart. Budgeted Budgeted Activity Cost Driver Activity Cost Purchasing Purchase orders 2,666 $ 3,412,480 Material handling Setups 4,160 4,291,600 Quality control Batches 1,720 928,888 Roasting Roasting hours 286, 280 7,010,8ee Blending Blending hours 72,800 2,475, 280 Packaging Packaging hours 59,800 2,096, eee Total manufacturing-overhead cost $20,834,888 References Data regarding the 20x1 production of Kona and Malaysian coffee are shown in the following table. There will be no raw- material inventory for either of these coffees at the beginning of the year. Budgeted sales Batch size Setups Purchase order size Roasting time Blending time Packaging time Kona 4,8eelb. 1,280 lb. 3 per batch 1,280 lb. 1 hr. per lee lb. 0.5 hr. per 100 lb. 0.1 hr. per lee lb. Malaysian 114, eee lb. 22,888 lb. 3 per batch 57,000 lb. 1 hr. per 100 lb. 2.5 hr. per 100 lb. 2.1 hr. per 100 lb. Required: 1. Using WGCC's current product-costing system: a. Determine the company's predetermined overhead rate using direct-labor cost as the single cost driver. b. Determine the full product costs and selling prices of one pound of Kona coffee and one pound of Malaysian coffee. 2. Develop a new product cost, using an activity-based costing approach, for one pound of Kona coffee and one pound of Malaysian coffee. Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 2 Determine the company's predetermined overhead rate using direct-labor cost as the single cost driver. Overhead rate per direct-labor dollar Reg 1A Req 1B > 3 Data for the 20x1 budget include manufacturing overhead of $20.034.880. which has been allocated on the basis of each product's direct-labor cost. The budgeted direct-labor cost for 20x1 totals $2.003.488. Based on the sales budget and raw-material budget. purchases and use of raw materials (mostly coffee beans) will total $7.200.000. The expected prime costs for one-pound bags of two of the company's products are as follows: Malaysian Direct material $2.70 $3.70 Direct labor 9.60 6.25 points Kona Skipped 0.60 eBook WGCC's controller believes the traditional product-costing system may be providing misleading cost information. She has developed an analysis of the 20x1 budgeted manufacturing-overhead costs shown in the following chart. Budgeted Budgeted Activity Cost Driver Activity Cost Purchasing Purchase orders 2,666 $ 3,412, 480 Material handling Setups 4,160 4,201,600 Quality control Batches 1,720 928, see Roasting Roasting hours 206, 2ee 7,010,800 Blending Blending hours 72,888 2,475,200 Packaging Packaging hours 59,800 2,086, Bee Total manufacturing-overhead cost $20,034,888 References Data regarding the 20x1 production of Kona and Malaysian coffee are shown in the following table. There will be no raw-material inventory for either of these coffees at the beginning of the year. Kona Budgeted sales Batch size Setups Purchase order size Roasting time Blending time Packaging time 4,880 lb. 1,200 lb. 3 per batch 1,280 lb. i hr. per 120 lb. 2.5 hr. per 100 lb. 0.1 hr. per 100 lb. Malaysian 114,Beelb. 22,8ee lb. 3 per batch 57, eee lb. 1 hr. per 100 lb. 2.5 hr. per 100 lb. B.1 hr. per 100 lb. Required: 1. Using WGCC's current product-costing system: a. Determine the company's predetermined overhead rate using direct-labor cost as the single cost driver. b. Determine the full product costs and selling prices of one pound of Kona coffee and one pound of Malaysian coffee. 2. Develop a new product cost, using an activity-based costing approach, for one pound of Kona coffee and one pound of Malaysian coffee. Complete this question by entering your answers in the tabs below. Reg 1A Req 1B Reg 2 Determine the full product costs and selling prices of one pound of Kona coffee and one pound of Malaysian coffee. (Round your intermediate calculations and final answers to 2 decimal places.) Kona Malaysian Full product cost per pound per pound Selling price per pound per pound 3 Data for the 20x1 budget include manufacturing overhead of $20.034.880, which has been allocated on the basis of each product's direct-labor cost. The budgeted direct-labor cost for 20x1 totals $2.003.488. Based on the sales budget and raw-material budget. purchases and use of raw materials (mostly coffee beans) will total $7.200.000. The expected prime costs for one-pound bags of two of the company's products are as follows: 6.25 points Direct material Direct labor Kona $2.70 0.60 Malaysian $3.79 0.60 Skipped eBook WGCC's controller believes the traditional product-costing system may be providing misleading cost information. She has developed an analysis of the 20x1 budgeted manufacturing-overhead costs shown in the following chart. Budgeted Budgeted Activity Cost Driver Activity Cost Purchasing Purchase orders 2,666 $ 3,412,480 Material handling Setups 4,160 4,291,600 Quality control Batches 1,728 928, 8ee Roasting Roasting hours 286, 280 7,010,880 Blending Blending hours 72,800 2,475,200 Packaging Packaging hours 59,800 2,686, eee Total manufacturing-overhead cost $20,834, 880 References Data regarding the 20x1 production of Kona and Malaysian coffee are shown in the following table. There will be no raw- material inventory for either of these coffees at the beginning of the year. Budgeted sales Batch size Setups Purchase order size Roasting time Blending time Packaging time Kona 4,880 lb. 1,280 lb. 3 per batch 1,280 lb. 1 hr. per 100 lb. 0.5 hr. per 100 lb. 0.1 hr. per 100 lb. Malaysian 114, eee lb. 22,888 lb. 3 per batch 57, Bee lb. 1 hr. per 100 lb. 0.5 hr. per 100 lb. 8.1 hr. per 100 lb. Required: 1. Using WGCC's current product-costing system: a. Determine the company's predetermined overhead rate using direct-labor cost as the single cost driver. b. Determine the full product costs and selling prices of one pound of Kona coffee and one pound of Malaysian coffee. 2. Develop a new product cost, using an activity-based costing approach, for one pound of Kona coffee and one pound of Malaysian coffee. Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 2 Develop a new product cost, using an activity-based costing approach, for one pound of Kona coffee and one pound of Malaysian coffee. (Round your intermediate calculations and final answers to 2 decimal places.) New Product Cost Kona coffee per pound Malaysian coffee per pound