ill Educ RYD Case 3A.6 Activity Study Gui X Case 3A-6 e | ezto.mheducation.com/h
ID: 342425 • Letter: I
Question
ill Educ RYD Case 3A.6 Activity Study Gui X Case 3A-6 e | ezto.mheducation.com/hm.tpx?--0.8 180387456258728_1520809825107 Java Source, Inc. (JSI), 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. JSI 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 JSI's coffees are very popular and sell in large volumes, while a few of the newer blends sell in very low volumes JSI prices its coffees at manufacturing cost plus a markup of 25% with some adjustments made to keep the company's prices competitive. For the coming year, JSI's budget includes estimated manufacturing overhead cost of $3,099,200. JSI assigns manufacturing overhead to products on the basis of direct labor-hours. The expected direct labor cost totals $552,000, which represents 46,000 hours of direct labor time. Based on the sales budget and expected raw materials costs, the company will purchase and use $5,000,000 of raw materials (mostly coffee beans) during the year 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 (030 hours per bag) Kenya Dark Viet Select $ 4.20 $ 3.20 $0.36 $ 0.36 JSI'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: Expected Activity for the Year Expected Cost for the Activity Cost Pool Purchasing Material handling Quality control Roasting Blending Packaging Activity Measure Purchase orders Number of setups Number of batches Roasting hours Blending hours Packaging hours Year 1.660 orders 1.830 setups S 498,000 732.000 145 600 1057,100 431.600 234,900 560 batches 96.100 roasting hours 33.200 blending hours 26,100 packaging hours Total manufacturing overhead cost 5 3,099.200 Type here to searchExplanation / Answer
Part A 1) Determine the predetermined overhead rate that will be used during the year. Predetermined overhead rate = Expected manufacturing overhead costs/Estimated direct labour hours Predetermined overhead rate = $3,099,200/46,000 hours $67.37 2) Determine the unit product cost of one pound of the Kenya dark coffee and one pound of the viet select coffee. Kenya Dark Viet Select Direct materials (given) $4.20 $3.20 Direct labor (given) $0.36 $0.36 Manufacturing overhead: 0.30 DLH × $67.37 per DLH $20.21 $20.21 Total unit product cost $24.77 $23.77
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.