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Budgeted sales Batch size Setups Purchase order size Roasting tine Blending time Packaging time Activity Purchasing Materials handling Quality control Roasting Blending Packaging Coffee Bean has total practical capacity as noted in the table below, Le processing 1680 purchase orders, 2,680 setups, etc. These are the levels of activity work that are sustainable Mona Loa 100,000 pounds 10,000 pounds 3 per batch 25,000 pounds 1 hour per 100 pounds 9.5 hour per 100 pounds 8.1 hour per 100 pounds Purchasing Quality control Rowling Bending Practical Capacity 1,600 2,500 1.400 102,000 38,000 32,000 Required: 1 Determine the activity rates based on practical capacity and the cost of ide capacity for each activity (Round "Usage Sand Practical Capactity Rate" to 2 decimal places. For percentages 1234-12.34%) Budgeted Cost 1.29 $ 649.000 1,940 $ 2,000 pounds see pounds 3 per batch see pounds 1 hour per 100 pounds 8.5 hour per 100 pounds 0.1 hour per 100 pounds 776.000 172.000 975.000 000 $ $7,500 $ 35.000 $ 27,400 S 274,000 $3.106.000 Usage Based Capaci Spending 1,480 2,480 1,400 100,000 Practical Capacity Rate de Capacity Cost $

Budgeted sales Batch size Setups Purchase order size Roasting tine Blending time Packaging time Activity Purchasing Materials handling Quality control Roasting Blending Packaging Coffee Bean has total practical capacity as noted in the table below, Le processing 1680 purchase orders, 2,680 setups, etc. These are the levels of activity work that are sustainable Mona Loa 100,000 pounds 10,000 pounds 3 per batch 25,000 pounds 1 hour per 100 pounds 9.5 hour per 100 pounds 8.1 hour per 100 pounds Purchasing Quality control Rowling Bending Practical Capacity 1,600 2,500 1.400 102,000 38,000 32,000 Required: 1 Determine the activity rates based on practical capacity and the cost of ide capacity for each activity (Round "Usage Sand Practical Capactity Rate" to 2 decimal places. For percentages 1234-12.34%) Budgeted Cost 1.29 $ 649.000 1,940 $ 2,000 pounds see pounds 3 per batch see pounds 1 hour per 100 pounds 8.5 hour per 100 pounds 0.1 hour per 100 pounds 776.000 172.000 975.000 000 $ $7,500 $ 35.000 $ 27,400 S 274,000 $3.106.000 Usage Based Capaci Spending 1,480 2,480 1,400 100,000 Practical Capacity Rate de Capacity Cost $

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Budgeted sales Batch size Setups Purchase order size Roasting time Blending time Packaging time Activity Purchasing Materials handling Quality control Roasting Blending Packaging Coffee Bean has total practical capacity as noted in the table below, l.e. processing 1,680 purchase orders, 2,680 setups, etc. These are the levels of activity work that are sustainable. Mona Loa 100,000 pounds 10,000 pounds 3 per batch 25,000 pounds 1 hour per 100 pounds 8.5 hour per 100 pounds 8.1 hour per 100 pounds Purchasing Materials handling Quality control Roasting Blending Packaging Practical Capacity 1,680 2,600 1,488 102,000 38,800 32,800 Required: L Determine the activity rates based on practical capacity and the cost of idle capacity for each activity. (Round "Usage %* and "Practical Capactity Rate" to 2 decimal places. For percentages 1234 = 12.34%) Budgeted Budgeted Cost Activity 1,298 $ 649,000 1,940 $ 776,000 BGO $ 172,000 Malaysian 2,000 pounds 500 pounds 3 per batch see pounds 1 hour per 100 pounds 8.5 hour per 100 pounds 0.1 hour per 100 pounds 97,500 $ 35,000 $ 27,400 $ $ 975,000 350,000 274,000 3,106,000 Usage Based Rate Practical Capacity at Current Spending 1,680 2,680 1,480 102,800 38,800 32,800 Usage % Practical Capacity Rate Unused Capacity Idle Capacity Cost $
Transcribed Image Text:Budgeted sales Batch size Setups Purchase order size Roasting time Blending time Packaging time Activity Purchasing Materials handling Quality control Roasting Blending Packaging Coffee Bean has total practical capacity as noted in the table below, l.e. processing 1,680 purchase orders, 2,680 setups, etc. These are the levels of activity work that are sustainable. Mona Loa 100,000 pounds 10,000 pounds 3 per batch 25,000 pounds 1 hour per 100 pounds 8.5 hour per 100 pounds 8.1 hour per 100 pounds Purchasing Materials handling Quality control Roasting Blending Packaging Practical Capacity 1,680 2,600 1,488 102,000 38,800 32,800 Required: L Determine the activity rates based on practical capacity and the cost of idle capacity for each activity. (Round "Usage %* and "Practical Capactity Rate" to 2 decimal places. For percentages 1234 = 12.34%) Budgeted Budgeted Cost Activity 1,298 $ 649,000 1,940 $ 776,000 BGO $ 172,000 Malaysian 2,000 pounds 500 pounds 3 per batch see pounds 1 hour per 100 pounds 8.5 hour per 100 pounds 0.1 hour per 100 pounds 97,500 $ 35,000 $ 27,400 $ $ 975,000 350,000 274,000 3,106,000 Usage Based Rate Practical Capacity at Current Spending 1,680 2,680 1,480 102,800 38,800 32,800 Usage % Practical Capacity Rate Unused Capacity Idle Capacity Cost $
Coffee Bean Incorporated (CBI) processes and distributes high-quality coffee. CBI buys coffee beans from around the world and roasts, blends, and packages them for resale. Currently, the firm offers 2 coffees to gourmet shops in 1-pound bags. The major cost is direct materials; however, a substantial amount of factory overhead is incurred in the predominantly automated roasting and packing process. The company uses relatively little direct labor. CBI prices its coffee at full product cost, including allocated overhead, plus a markup of 30%. If its prices are significantly higher than the market, CBI lowers its prices. The company competes primarily on the quality of its products, but customers are price conscious as well. Data for the current budget include factory overhead of $3,196,000, which has been allocated on the basis of each product's direct abor cost. The budgeted direct labor cost for the current year totals $600,000. The firm budgeted $6,000,000 for purchase and use of direct materials (mostly coffee beans). The budgeted direct costs for 1-pound bags are as follows: Direct materials Direct labor Mona Loa $4.20 8.30 CBI's controller, Mona Clin, believes that its current product costing system could be providing misleading cost information. She has developed this analysis of the current year's budgeted factory overhead costs: Activity Purchasing Materials handling Quality control Roasting Blending Packaging Total factory overhead cost Malaysian $ 3.28 0.30 Budgeted sales Batch size Cost Driver Purchase orders Setups Batches Roasting hours Blending hours Packaging hours Budgeted Driver Consumption 1,200 1,940 Mona Loa 100,000 pounds 10.008 nounds 868 97,500 35,000 27,400 Data regarding the current year's production for the Mona Loa and Malaysian lines follow. There is no beginning or ending direct materials inventory for either of these coffees. Budgeted Cost $ 649,000 776,000 172,000 975,000 350,000 274,000 $3,196,000 Malaysian 2,000 pounds 500 ods
Transcribed Image Text:Coffee Bean Incorporated (CBI) processes and distributes high-quality coffee. CBI buys coffee beans from around the world and roasts, blends, and packages them for resale. Currently, the firm offers 2 coffees to gourmet shops in 1-pound bags. The major cost is direct materials; however, a substantial amount of factory overhead is incurred in the predominantly automated roasting and packing process. The company uses relatively little direct labor. CBI prices its coffee at full product cost, including allocated overhead, plus a markup of 30%. If its prices are significantly higher than the market, CBI lowers its prices. The company competes primarily on the quality of its products, but customers are price conscious as well. Data for the current budget include factory overhead of $3,196,000, which has been allocated on the basis of each product's direct abor cost. The budgeted direct labor cost for the current year totals $600,000. The firm budgeted $6,000,000 for purchase and use of direct materials (mostly coffee beans). The budgeted direct costs for 1-pound bags are as follows: Direct materials Direct labor Mona Loa $4.20 8.30 CBI's controller, Mona Clin, believes that its current product costing system could be providing misleading cost information. She has developed this analysis of the current year's budgeted factory overhead costs: Activity Purchasing Materials handling Quality control Roasting Blending Packaging Total factory overhead cost Malaysian $ 3.28 0.30 Budgeted sales Batch size Cost Driver Purchase orders Setups Batches Roasting hours Blending hours Packaging hours Budgeted Driver Consumption 1,200 1,940 Mona Loa 100,000 pounds 10.008 nounds 868 97,500 35,000 27,400 Data regarding the current year's production for the Mona Loa and Malaysian lines follow. There is no beginning or ending direct materials inventory for either of these coffees. Budgeted Cost $ 649,000 776,000 172,000 975,000 350,000 274,000 $3,196,000 Malaysian 2,000 pounds 500 ods
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