Do not give image format 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 $3,040,500. JSI allocates manufacturing overhead toproducts using direct labor-hours. The expected direct labor cost totals $576,000, which represents 48,000 hours of direct labor time.The expected direct materials and direct labor costs for one-pound bags of two of the company's coffee blends appear below.Kenya Dark Viet Select$ 4.20$ 3.50$ 0.42$ 0.42Direct materialsDirect labor (0.035 hour per bag)JSI's controller believes the company's traditional costing system may be providing misleading cost information; therefore, hegathered the following activity-based cost information:Activity Cost PoolPurchasingMaterial handlingQuality controlActivity MeasurePurchase orders.Number of setupsNumber of batchesRoasting hours.Blending hoursPackaging hoursExpected production and salesBatch sizeSetupsPurchase order sizeRoasting time per 100 poundsBlending time per 100 poundsPackaging time per 100 poundsExpected Activity for theYear1,720 orders1,820 setups610 batches1.5 roasting hours0.5 blending hour0.3 packaging hourRoastingBlendingPackagingTotal manufacturing overhead costData regarding the expected production and sales of Kenya Dark and Viet Select coffee are presented below.Kenya Dark98,000 pounds9,800 pounds2 per batch19,600 poundsViet Select1,000 pounds200 pounds2 per batch200 pounds96,100 roasting hours33,700 blending hours25,700 packaging hoursExpected Costfor the Year$ 533,200709,800146,4001,057,1001.5 roasting hours0.5 blending hour0.3 packaging hour337,000257,000$3,040,500 Required:1. Using direct labor-hours as the manufacturing overhead cost allocation base:a. Calculate the plantwide predetermined overhead rate.b. 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:a. Calculate the total manufacturing overhead cost allocated to Kenya Dark and Viet Select.b. Using the data developed in (2a) above, compute Kenya Dark's and Viet Select's manufacturing overhead cost per pound.c. Calculate the unit product cost of one pound of Kenya Dark and one pound of Viet Select.Complete this question by entering your answers in the tabs below.Required 1A Required 1B Required 2A Required 2BUsing direct labor-hours as the manufacturing overhead cost allocation base, calculate the plantwide predetermined overheadrate.Note: Round your answer to 2 decimal places.Predetermined overhead rateper DLHRequired 2C< Required 1ARequired 1B >

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Description: Do not give image format 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

ABC method also known as activity-based costing is a costing method that computes the total cost of…

Business

Accounting

Required: 1. Using direct labor-hours as the manufacturing overhead cost allocation base: a. Calculate the plantwide predetermined overhead rate. b. 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: a. Calculate the total manufacturing overhead cost allocated to Kenya Dark and Viet Select. b. Using the data developed in (2a) above, compute Kenya Dark's and Viet Select's manufacturing overhead cost per pound. c. Calculate the unit product cost of one pound of Kenya Dark and one pound of Viet Select. Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2A Required 2B Using direct labor-hours as the manufacturing overhead cost allocation base, calculate the plantwide predetermined overhead rate. Note: Round your answer to 2 decimal places. Predetermined overhead rate per DLH Required 2C < Required 1A Required 1B >

Required: 1. Using direct labor-hours as the manufacturing overhead cost allocation base: a. Calculate the plantwide predetermined overhead rate. b. 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: a. Calculate the total manufacturing overhead cost allocated to Kenya Dark and Viet Select. b. Using the data developed in (2a) above, compute Kenya Dark's and Viet Select's manufacturing overhead cost per pound. c. Calculate the unit product cost of one pound of Kenya Dark and one pound of Viet Select. Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2A Required 2B Using direct labor-hours as the manufacturing overhead cost allocation base, calculate the plantwide predetermined overhead rate. Note: Round your answer to 2 decimal places. Predetermined overhead rate per DLH Required 2C < Required 1A Required 1B >

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Process Costing

Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure. 

Job Costing

Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.

ABC Costing

Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.

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Question

Do not give image format

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 $3,040,500. JSI allocates manufacturing overhead to
products using direct labor-hours. The expected direct labor cost totals $576,000, which represents 48,000 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
$ 4.20
$ 3.50
$ 0.42
$ 0.42
Direct materials
Direct labor (0.035 hour per bag)
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
Purchasing
Material handling
Quality control
Activity Measure
Purchase orders.
Number of setups
Number of batches
Roasting hours.
Blending hours
Packaging hours
Expected production and sales
Batch size
Setups
Purchase order size
Roasting time per 100 pounds
Blending time per 100 pounds
Packaging time per 100 pounds
Expected Activity for the
Year
1,720 orders
1,820 setups
610 batches
1.5 roasting hours
0.5 blending hour
0.3 packaging hour
Roasting
Blending
Packaging
Total manufacturing overhead cost
Data regarding the expected production and sales of Kenya Dark and Viet Select coffee are presented below.
Kenya Dark
98,000 pounds
9,800 pounds
2 per batch
19,600 pounds
Viet Select
1,000 pounds
200 pounds
2 per batch
200 pounds
96,100 roasting hours
33,700 blending hours
25,700 packaging hours
Expected Cost
for the Year
$ 533,200
709,800
146,400
1,057,100
1.5 roasting hours
0.5 blending hour
0.3 packaging hour
337,000
257,000
$3,040,500

Required:
1. Using direct labor-hours as the manufacturing overhead cost allocation base:
a. Calculate the plantwide predetermined overhead rate.
b. 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:
a. Calculate the total manufacturing overhead cost allocated to Kenya Dark and Viet Select.
b. Using the data developed in (2a) above, compute Kenya Dark's and Viet Select's manufacturing overhead cost per pound.
c. Calculate the unit product cost of one pound of Kenya Dark and one pound of Viet Select.
Complete this question by entering your answers in the tabs below.
Required 1A Required 1B Required 2A Required 2B
Using direct labor-hours as the manufacturing overhead cost allocation base, calculate the plantwide predetermined overhead
rate.
Note: Round your answer to 2 decimal places.
Predetermined overhead rate
per DLH
Required 2C
< Required 1A
Required 1B >

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