World Gourmet Coffee Company (WGCC) is a distributor and processor of different blends of coffee. The company buys coffe

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World Gourmet Coffee Company Wgcc Is A Distributor And Processor Of Different Blends Of Coffee The Company Buys Coffe 1 (63.37 KiB) Viewed 50 times

World Gourmet Coffee Company Wgcc Is A Distributor And Processor Of Different Blends Of Coffee The Company Buys Coffe 2 (43.25 KiB) Viewed 50 times

World Gourmet Coffee Company Wgcc Is A Distributor And Processor Of Different Blends Of Coffee The Company Buys Coffe 3 (62.8 KiB) Viewed 50 times

World Gourmet Coffee Company Wgcc Is A Distributor And Processor Of Different Blends Of Coffee The Company Buys Coffe 4 (56.41 KiB) Viewed 50 times

World Gourmet Coffee Company (WGCC) is a distributor and processor of different blends of coffee. The company buys coffee beans from around the world and roasts, blends, and packages them for resale. WGCC currently has 15 different coffees that it offers to gourmet shops in one-pound bags. The major cost is raw materials; however, there is a substantial amount of manufacturing overhead in the predominantly automated roasting and packing process. The company uses relatively little direct labor. Some of the coffees are very popular and sell in large volumes, while a few of the newer blends have very low volumes. WGCC prices its coffee at full product cost, including allocated overhead, plus a markup of 30 percent. If prices for certain coffees are significantly higher than market, adjustments are made. The company competes primarily on the quality of its products, but customers are price- conscious as well. Data for the 20x1 budget include manufacturing overhead of $15,860,640, which has been allocated on the basis of each product's direct-labor cost. The budgeted direct-labor cost for 20x1 totals $1,586,064. Based on the sales budget and raw-material budget, purchases and use of raw materials (mostly coffee beans) will total $6,500,000. The expected prime costs for one-pound bags of two of the company's products are as follows: Kona Malaysian $3.60 $4.60 0.50 0.50 Direct material Direct labor WGCC's controller believes the traditional product-costing system may be providing misleading cost information. She has developed an analysis of the 20x1 budgeted manufacturing-overhead costs shown in the following chart. Activity Purchasing Material handling. Quality control Roasting Blending Packaging Total manufacturing-overhead cost Cost Driver Purchase orders Setups Batches Roasting hours Blending hours Packaging hours Budgeted Activity 2,491 3, 880 1,580 199, 200 70,000 55,500 Budgeted Cost $ 2,839,740 3,511, 400 742,600 5,378, 400. 1,890,000 1,498,500 $15,860, 640
Packaging Total manufacturing-overhead cost Budgeted sales Batch size Setups Purchase order size Roasting time Blending time Packaging time Packaging hours Data regarding the 20x1 production of Kona and Malaysian coffee are shown in the following table. There will be no raw-material inventory for either of these coffees at the beginning of the year. Kona Req 1A 3,400 lb. 850 lb. 3 per batch 850 lb. Req 18 1hr. per 100 lb. 0.5hr. per 100 lb. 0.1hr. per 100 lb. 55,500 Malaysian 107,000 lb. 21,400 lb. 3 per batch 53,500 lb. 1hr. per 100 lb. 0.5hr, per 100 lb.. 0.1 hr. per 100 lb.. Required: 1. Using WGCC's current product-costing system: a. Determine the company's predetermined overhead rate using direct labor cost as the single cost driver. b. Determine the full product costs and selling prices of one pound of Kona coffee and one pound of Malaysian coffee. 2. Develop a new product cost, using an activity-based costing approach, for one pound of Kona coffee and one pound of Malaysian coffee. Complete this question by entering your answers in the tabs below. 1,498,500 $15,860, 640 Reg 2 Determine the company's predetermined overhead rate using direct-labor cost as the single cost driver. Overhead rate per direct-labor dollar Req 18 >
Buageted sales. Batch size Setups. Purchase order size Roasting time Blending time Packaging time Req 1A 3,400 10. 850 lb.. 3 per batch. Req 1B Full product cost Selling price 850 lb. 1hr. per 100 lb. 0.5 hr. per 100 lb. 0.1hr. per 100 lb. Required: 1. Using WGCC's current product-costing system: a. Determine the company's predetermined overhead rate using direct-labor cost as the single cost driver. b. Determine the full product costs and selling prices of one pound of Kona coffee and one pound of Malays 2. Develop a new product cost, using an activity-based costing approach, for one pound of Kona coffee and coffee. Complete this question by entering your answers in the tabs below. 107, 10. 21,400 lb. Kona 3 per batch Req 2 Determine the full product costs and selling prices of one pound of Kona coffee and one pound of Malaysian coffe your intermediate calculations and final answers to 2 decimal places.) per pound per pound 53,500 lb. < Req 1A 1 hr. per 100 lb. 0.5 hr. per 100 lb. 0.1 hr. per 100 lb. Malaysian per pound per pound Req 2 >
Buageted sales Batch size Setups Purchase order size Roasting time Blending time Packaging time Req 1A 3,400 10. 850 lb. 3 per batch Req 1B Kona coffee Malaysian coffee 850 lb. 1 hr. per 100 lb. 0.5 hr. per 100 lb. 0.1 hr. per 100 lb. Required: 1. Using WGCC's current product-costing system: a. Determine the company's predetermined overhead rate using direct-labor cost as the single cost driver. b. Determine the full product costs and selling prices of one pound of Kona coffee and one pound of Malaysian coff 2. Develop a new product cost, using an activity-based costing approach, for one pound of Kona coffee and one po coffee. Complete this question by entering your answers in the tabs below. Req 2 107,000 10. 21,400 lb. 3 per batch New Product Cost per pound per pound. 53,500 lb. < Req 1B 1 hr. per 100 lb. 0.5 hr. per 100 lb. 0.1 hr. per 100 lb.. Develop a new product cost, using an activity-based costing approach, for one pound of Kona coffee and one pound of Malaysian coffee. (Round your intermediate calculations and final answers to 2 decimal places.) Reg 2 >