Data regarding the current year's production for the Mona Loa and Malaysian lines follow. There is no beginning orending direct materials inventory for either of these coffees.Malaysian2,000 pounds500 poundsMona Loa100,000 pounds10,000 poundsper batch25,000 pounds1 hour per 100 pounds0.5 hour per 100 pounds0.1 hour per 100 poundsBudgeted salesBatch size3 per batch500 pounds1 hour per 100 pounds0.5 hour per 100 pounds0.1 hour per 100 poundsSetupsPurchase order sizeRoasting timeBlending timePackaging timethe table below, i.e. processing 1,640 purchase orders, 2,640has total practical capacity as notecsetups, etc. These are the levels of activity work that are sustainable.CoВеPracticalСaраcity1,6402,6401,440102,40038,40032,400ActivityPurchasingMaterials handlingQuality controlRoastingBlendingPackagingRequired: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%.)%3D Coffee Bean Incorporated (CBI) processes and distributes high-quality coffee. CBI buys coffee beans from aroundthe world and roasts, blends, and packages them for resale. Currently, the firm offers 2 coffees to gourmet shops in1-pound bags. The major cost is direct materials; however, a substantial amount of factory overhead is incurred inthe 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 aresignificantly higher than the market, CBI lowers its prices. The company competes primarily on the quality of itsproducts, 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 eachproduct's direct labor cost. The budgeted direct labor cost for the current year totals $600,000. The firm budgeted$6,000,000 for purchase and use of direct materials (mostly coffee beans).The budgeted direct costs for 1-pound bags are as follows:Malaysian$ 3.20Mona LoaDirect materials$ 4.20Direct labor0.300.30CBI's controller, Mona Clin, believes that its current product costing system could be providing misleading costinformation. She has developed this analysis of the current year's budgeted factory overhead costs:BudgetedDriverBudgeted Cost$ 639,000768,000168,000973,000348,000ActivityPurchasingMaterials handlingConsumption1,2781,920Cost DriverPurchase ordersSetupsQuality controlRoastingBlendingBatches840Roasting hoursBlending hoursPackaging hours97,30034,800272,000$ 3,168,000Packaging27,200Total factory overhead cost

Activity Rates = Budgeted CostBudgeted Driver Consumption

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. 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 Mona Loa Budgeted sales Batch size 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 Setups Purchase order size Roasting time Blending time Packaging time 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. Practical Activity Purchasing Materials handling Quality control Roasting Blending Packaging Сарacity 1,640 2,640 1,440 102,400 38,400 32,400 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%.)

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. 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 Mona Loa Budgeted sales Batch size 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 Setups Purchase order size Roasting time Blending time Packaging time 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. Practical Activity Purchasing Materials handling Quality control Roasting Blending Packaging Сарacity 1,640 2,640 1,440 102,400 38,400 32,400 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%.)

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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