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 $3,168,000, which has been allocated on the basis of each product's direct labor 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: Mona Loa $ 4.20 0.30 Malaysian $3.20 0.30 Direct materials Direct labor 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 Budgeted sales Batch size Setups Purchase order size Roasting time Blending time Packaging time Activity Purchasing Materials handling Quality control Roasting Blending Packaging Cost Driver Purchase orders Activity Setups Batches Purchasing Materials handling Quality control Roasting Blending Packaging Roasting hours Blending hours Packaging hours 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. Mona Loa 100,000 pounds 10,000 pounds 3 per batch 25,000 pounds 1 hour per 100 pounds 0.5 hour per 100 pounds 0.1 hour per 100 pounds Practical Capacity 1,640 2,640 1,440 Budgeted Activity 102,400 38,400 32,400 Budgeted Driver Consumption 1,278 1,920 840 Coffee Bean has total practical capacity as noted in the table below, i.e. processing 1,640 purchase orders, 2,640 setups, etc. These are the levels of activity work that are sustainable. 97,300 34,800 27,200 Malaysian 2,000 pounds 500 pounds 1,278 S 639,000 1,920 $ 768,000 840 $ 168,000 97,300 $ 973,000 34,800 $ 348,000 27,200 $ 272,000 $ 3,168,000 Budgeted Cost $ 639,000 768,000 168,000 973,000 Required: 1. 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%.) 348,000 272,000 $ 3,168,000 3 per batch 500 pounds 1 hour per 100 pounds 0.5 hour per 100 pounds 0.1 hour per 100 pounds Budgeted Cost Usage Based Rate Practical Capacity at Current Spending 1,640 2,640 1,440 102,400 38,400 32,400 Usage % Practical Capacity Rate Unused Capacity Idle Capacity Cost $ 0