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Data regarding the expected production and sales of Kenya Dark and Viet Select coffee are presented below. Kenya Dark Viet Select pounds Expected production and sales 96,000 9,600 pounds per batch 3 600 pounds roasting hours 1.5 blending hour 0.5 packaging hour 0.3 Batch size Setups 19,200 Purchase order size Roasting time per 100 pounds 1.5 Blending time per 100 pounds 0.5 Packaging time per 100 pounds 0.3 3,000 pounds pounds 600 3 per batch pounds roasting hours: blending hour packaging hour Required: 1. Using direct labor-hours as the manufacturing overhead cost allocation base: 1. Calculate the plantwide predetermined overhead rate. 2. Calculate the unit product cost of one pound of Kenya Dark and one pound of Viet Select. 2. Using the activity-based absorption costing approach: 1. Calculate the total manufacturing overhead cost allocated to Kenya Dark and Viet Select. 2. Using the data developed in (2a) above, compute Kenya Dark's and Viet Select's manufacturing overhead cost per pound. 3. Calculate the unit product cost of one pound of Kenya Dark and one pound of Viet Select. Activate Wind Go to Settings to a

Data regarding the expected production and sales of Kenya Dark and Viet Select coffee are presented below. Kenya Dark Viet Select pounds Expected production and sales 96,000 9,600 pounds per batch 3 600 pounds roasting hours 1.5 blending hour 0.5 packaging hour 0.3 Batch size Setups 19,200 Purchase order size Roasting time per 100 pounds 1.5 Blending time per 100 pounds 0.5 Packaging time per 100 pounds 0.3 3,000 pounds pounds 600 3 per batch pounds roasting hours: blending hour packaging hour Required: 1. Using direct labor-hours as the manufacturing overhead cost allocation base: 1. Calculate the plantwide predetermined overhead rate. 2. Calculate the unit product cost of one pound of Kenya Dark and one pound of Viet Select. 2. Using the activity-based absorption costing approach: 1. Calculate the total manufacturing overhead cost allocated to Kenya Dark and Viet Select. 2. Using the data developed in (2a) above, compute Kenya Dark's and Viet Select's manufacturing overhead cost per pound. 3. Calculate the unit product cost of one pound of Kenya Dark and one pound of Viet Select. Activate Wind Go to Settings to a

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Student question Java Source, Incorporated, (JSI) roasts, blends, and packages coffee beans for resale. Some of JSI's coffees sell in large volumes, while some newer blends sell in very low volumes. JSI prices its coffees at manufacturing cost plus a markup of 25%. For next year, JSI's budget includes estimated manufacturing overhead cost of $3,020,600. JSI allocates manufacturing overhead to products using direct labor-hours. The expected direct labor cost totals $612,000, which represents 51,000 hours of direct labor time. The expected direct materials and direct labor costs for one-pound bags of two of the company's coffee blends appear below. Kenya Dark Viet Select Direct materials $ 4.40 $ 3.20 Direct labor (0.030 hour per bag) $ 0.36 JSI's controller believes the company's traditional costing system may be providing misleading cost information; therefore, he gathered the following activity-based cost information: Activity Cost Pool Activity Measure Expected Activity for the Year Expected Cost for the Year Purchasing Purchase orders 1,740 orders Number of setups 1,770 Number of batches 580 Material handling Quality control Roasting Blending Packaging Expected production and sales 96,000 9,600 Batch size Roasting hours Blending hours Packaging hours 3 $ 0.36 Setups Purchase order size 19,200 Roasting time per 100 pounds 1.5 Blending time per 100 pounds 0.5 Packaging time per 100 pounds 0.3 95,600 33,100 Total manufacturing overhead cost Data regarding the expected production and sales of Kenya Dark and Viet Select coffee are presented below. Kenya Dark Viet Select pounds pounds per batch 26,300 3,000 pounds 600 3 pounds. roasting hours 1.5 blending hour 0.5 packaging hour 0.3 600 setups batches pounds per batch pounds roasting hours blending hour packaging hour roasting hours blending hours packaging hours Required: 1. Using direct labor-hours as the manufacturing overhead cost allocation base: 1. Calculate the plantwide predetermined overhead rate. 2. Calculate the unit product cost of one pound of Kenya Dark and one pound of Viet Select. 2. Using the activity-based absorption costing approach: 1. Calculate the total manufacturing overhead cost allocated to Kenya Dark and Viet Select. $ 504,600 708,000 139,200 956,000 397,200 315,600 $ 3,020,600 Tim 2. Using the data developed in (2a) above, compute Kenya Dark's and Viet Select's manufacturing overhead cost per pound. 3. Calculate the unit product cost of one pound of Kenya Dark and one pound of Viet Select. Activate Window: Go to Settings to activa
Transcribed Image Text:Student question Java Source, Incorporated, (JSI) roasts, blends, and packages coffee beans for resale. Some of JSI's coffees sell in large volumes, while some newer blends sell in very low volumes. JSI prices its coffees at manufacturing cost plus a markup of 25%. For next year, JSI's budget includes estimated manufacturing overhead cost of $3,020,600. JSI allocates manufacturing overhead to products using direct labor-hours. The expected direct labor cost totals $612,000, which represents 51,000 hours of direct labor time. The expected direct materials and direct labor costs for one-pound bags of two of the company's coffee blends appear below. Kenya Dark Viet Select Direct materials $ 4.40 $ 3.20 Direct labor (0.030 hour per bag) $ 0.36 JSI's controller believes the company's traditional costing system may be providing misleading cost information; therefore, he gathered the following activity-based cost information: Activity Cost Pool Activity Measure Expected Activity for the Year Expected Cost for the Year Purchasing Purchase orders 1,740 orders Number of setups 1,770 Number of batches 580 Material handling Quality control Roasting Blending Packaging Expected production and sales 96,000 9,600 Batch size Roasting hours Blending hours Packaging hours 3 $ 0.36 Setups Purchase order size 19,200 Roasting time per 100 pounds 1.5 Blending time per 100 pounds 0.5 Packaging time per 100 pounds 0.3 95,600 33,100 Total manufacturing overhead cost Data regarding the expected production and sales of Kenya Dark and Viet Select coffee are presented below. Kenya Dark Viet Select pounds pounds per batch 26,300 3,000 pounds 600 3 pounds. roasting hours 1.5 blending hour 0.5 packaging hour 0.3 600 setups batches pounds per batch pounds roasting hours blending hour packaging hour roasting hours blending hours packaging hours Required: 1. Using direct labor-hours as the manufacturing overhead cost allocation base: 1. Calculate the plantwide predetermined overhead rate. 2. Calculate the unit product cost of one pound of Kenya Dark and one pound of Viet Select. 2. Using the activity-based absorption costing approach: 1. Calculate the total manufacturing overhead cost allocated to Kenya Dark and Viet Select. $ 504,600 708,000 139,200 956,000 397,200 315,600 $ 3,020,600 Tim 2. Using the data developed in (2a) above, compute Kenya Dark's and Viet Select's manufacturing overhead cost per pound. 3. Calculate the unit product cost of one pound of Kenya Dark and one pound of Viet Select. Activate Window: Go to Settings to activa
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