Artisan Coffee purchases green coffee beans from various suppliers and then roas

Question

Artisan Coffee purchases green coffee beans from various suppliers and then roasts the coffee beans in its roasting facility. (click the icon to view the manufacturing intormation.) Read the requirements. Requirement 1. What is the standard cost of producing one 25-pound case of roasted coffee beans? First, select the formula to calculate the standard cost of input. Then calculate the standard cost of each input. Finally, calculate the total standard cost of producing one 25-pound case of roasted ooffee beans. (Round your answers to the nearest cent.) Standard x Standard Standard cost of InputMore Info Direct materials Direct latbor Variable manufacturing overhead Fixed manufacturing overhead Total pounds per pound 24 per hour- The roasted beans are sold in 25-pound cases to grocery stores and restaurants for $85 per case. Each case of roasted coffee beans requires 10 pounds of unroasted qreen coffee beans. The company can purchase the green coffee beans, Including frelght-in and purchase discounts, for $3.50 per pound. Each case of roasted coffee beans requires 0.10 haurs of direct labor in the production process. Direct laborers are pald $24 per hour, which includes payroll taxes and emplayee benefits. The company uses machine hours to allocate its manufacturing overhead. Each case of roasted coftee beans requires 0.20 machine hours to produce. The company expects to produce 450,000 cases of roasted coffee beans in the upcoming year. At this production volume, the company expects total variable manufacturing overhead to be $3,600,000 for the year. The company also expects to incur $60,000 of fixed manufacturing overhead per month, or $720,000 for the year. machine hours X er hour- machine hours X per hour - Requirement 2. What is the standard gross profit per 25-pound case of roasted coffee beans? (Round your answers to the n The gross profit per 25-b case of roasted coffee is $ Requirement 3. How often should the company reassess standard quantities and standard prices tor inputs?

Explanation / Answer

1) Standard price of producing one 25 pound case of roasted coffee beans

There the standard cost is $47.

2)  

Gross profit per 25 ib case of roasted coffee in $ = 38

3) The company should reassess the standard quantities and standard prices for inputs on a monthly basis.

Standard quantity Standard price Standard cost of input Direct materials 10 pounds $3.5 per pound $35.0 Direct labor 0.1 hours $24.0 per hour $2.4 variable manufacturing overhead 0.2 machine hours $40.0 per hour $8.0 Fixed manufacturing overhead 0.2 machine hours $8.0 per hour $1.6 Total $47.0

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