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%.) Activity Budgeted Activity Budgeted Cost Usage Based Rate Practical Capacity at Current Spending Usage % Practical Capacity Rate Unused Capacity Idle Capacity Cost Purchasing Materials handling Quality control 1,198 $ 1,840 $ 760 $ Roasting 96,500 $ 599,000 736,000 $ 152,000 $ 965,000 $ $ 500 1,480 400 2,480 200 1,280 10 100,800 80.95% $ 74.19% $ 59.38% $ 95.73% $ 404.73 296.77 282 $ 114,134 640 $ 189,933 118.75 520 $ 61,750 9.57 4,300 $ 41,151 Blending 34,000 $ 340,000 $ 10 36,800 92.93% S 9.24 2,800 $ 25,872 Packaging 28,400 $ 264,000 $ 10 30,800 85.71% S 8.57 4,400 $ 37,708 $ 3,056,000 $ 470,548 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 $3,056,000, 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: Direct materials Direct labor Mona Loa $ 4.20 0.30 Malaysian $ 3.20 0.30 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 Budgeted Driver Cost Driver Purchase orders Consumption Budgeted Cost Setups 1,198 1,840 $ 599,000 736,000 Batches 760 152,000 Roasting hours 96,500 965,000 Blending hours 34,000 340,000 Packaging hours 26,400 264,000 $ 3,056,000 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 sales Batch size Setups Purchase order size Roasting time Blending time Packaging time 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 Malaysian 2,000 pounds 500 pounds 3 per batch 500 pounds 1 hour per 100 pounds 0.5 hour per 100 pounds 0.1 hour per 100 pounds Coffee Bean has total practical capacity as noted in the table below, I.e. processing 1,480 purchase orders, 2,480 setups, etc. These are the levels of activity work that are sustainable. Practical Activity Capacity Purchasing 1,480 Materials handling 2,480 Quality control 1,280 Roasting 100,800 Blending Packaging 36,800 30,800