Please do not give image format and solve with explanation Coffee Bean Incorporated (CBI) processes and distributes high-quality coffee. CBI buys coffee beans from around the world androasts, blends, and packages them for resale. Currently, the firm offers 2 coffees to gourmet shops in 1-pound bags. The major cost isdirect materials; however, a substantial amount of factory overhead is incurred in the predominantly automated roasting and packingprocess. 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 thanthe market, CBI lowers its prices. The company competes primarily on the quality of its products, but customers are price conscious aswell.Data for the current budget Include factory overhead of $3,084,000, which has been allocated on the basis of each product's directlabor cost. The budgeted direct labor cost for the current year totals $600,000. The firm budgeted $6,000,000 for purchase and useof direct materials (mostly coffee beans).The budgeted direct costs for 1-pound bags are as follows:MalaysianMona Loa$ 4.20$ 3.200.300.30Direct materialsDirect laborCBI's controller, Mona Clin, believes that its current product costing system could be providing misleading cost Information. She hasdeveloped this analysis of the current year's budgeted factory overhead costs:ActivityPurchasingMaterials handlingQuality controlRoastingBlendingPackagingTotal factory overhead costCost DriverPurchase ordersSetupsBatchesRoasting hoursBlending hoursPackaging hoursBudgeted DriverConsumption1,2181,86078896,70034,20026,600Budgeted Cost$ 609,000744,000156,000967,000342,000266,000$ 3,084,000Data rogarding the current year's production for the Mona Loa and Malavclan linor follow There is no boginning G onding direct PackagingTotal factory overhead costBudgeted salesBatch sizeSetupsPurchase order sizeRoasting timeBlending timePackaging timeData regarding the current year's production for the Mona Loa and Malaysian lines follow. There is no beginning or ending directmaterials Inventory for elther of these coffees.OActivityPurchasingMaterials handlingQuality controlRoastingBlendingPackagingMona Loa100,000 pounds10,000 poundsActivity3 per batch25,000 poundsPurchasingMaterials handlingQuality controlRoastingBlendingPackagingPackaging hours1 hour per 100 pounds.0.5 hour per 100 pounds0.1 hour per 100 poundsShow Transcribed TextCoffee Bean has total practical capacity as noted in the table below, I.e. processing 1,520 purchase orders, 2,520 setups, etc. Theseare the levels of activity work that are sustainable.PracticalCapacity1,5202,5201,320101,20037,20031,20026,600BudgetedActivityRequired: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%.)Budgeted Cost Usage BasedRate$ 3,084,000Malaysian2,000 poundssee pounds.3 per batch500 pounds1 hour per 100 pounds8.5 hour per 100 pounds8.1 hour per 100 pounds.1.218 S 600,0001,800 $744,000780 $ 156.00096,700 $ 967,00034,200 $ 342,00026,000 $ 268,000S 3,084,000PracticalCapacity atCurrentSpending1,5202,5201.320101,20037,20031,200ĊUsage %PracticalCapacity RateUnusedCapacityIdle CapacityCost

Name: Please do not give image format and solve with explanation Coffee Bean
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Description: Please do not give image format and solve with explanation Coffee Bean Incorporated (CBI) processes and distributes high-quality coffee. CBI buys coffee beans from around the world androasts, blends, and packages them for resale. Currently, the firm

Coffee Bean Incorporated (CBI) has two coffee products - Mona Loa and Malaysian CBI’s controller,…

Business

Accounting

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%)

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%)

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter11: Linear Optimization Models

Section: Chapter Questions

Problem 7P: Vollmer Manufacturing makes three components for sale to refrigeration companies. The components are...

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Vollmer Manufacturing makes three components for sale to refrigeration companies. The components are processed on two machines: a shaper and a grinder. The times (in minutes) required on each machine are as follows: The shaper is available for 120 hours, and the grinder for 110 hours. No more than 200 units of component 3 can be sold, but up to 1,000 units of each of the other components can be sold. In fact, the company already has orders for 600 units of component 1 that must be satisfied. The profit contributions for components 1, 2, and 3 are 8, 6, and 9, respectively. a. Formulate and solve for the recommended production quantities. b. What are the objective coefficient ranges for the three components? Interpret these ranges for company management. c. What are the right-hand-side ranges? Interpret these ranges for company management. d. If more time could be made available on the grinder, how much would it be worth? e. If more units of component 3 can be sold by reducing the sales price by 4, should the company reduce the price?
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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 $3,238,000, 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…
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TufStuff, Inc., sells a wide range of drums, bins, boxes, and other containers that are used in the chemical industry. One of the company’s products is a heavy-duty corrosion-resistant metal drum, called the WVD drum, used to store toxic wastes. Production is constrained by the capacity of an automated welding machine that is used to make precision welds. A total of 2,000 hours of welding time is available annually on the machine. Because each drum requires 0.4 hours of welding machine time, annual production is limited to 5,000 drums. At present, the welding machine is used exclusively to make the WVD drums. The accounting department has provided the following financial data concerning the WVD drums: WVD Drums Selling price per drum $ 149.00 Cost per drum: Direct materials $52.10 Direct labor ($18 per hour) 3.60 Manufacturing overhead 4.50 Selling and administrative expense 29.80 90.00 Margin per drum $ 59.00 Management…
TufStuff, Inc., sells a wide range of drums, bins, boxes, and other containers that are used in the chemical industry. One of the company’s products is a heavy-duty corrosion-resistant metal drum, called the WVD drum, used to store toxic wastes. Production is constrained by the capacity of an automated welding machine that is used to make precision welds. A total of 2,000 hours of welding time is available annually on the machine. Because each drum requires 0.4 hours of welding machine time, annual production is limited to 5,000 drums. At present, the welding machine is used exclusively to make the WVD drums. The accounting department has provided the following financial data concerning the WVD drums: WVD Drums Selling price per drum $ 149.00 Cost per drum: Direct materials $52.10 Direct labor ($18 per hour) 3.60 Manufacturing overhead 4.50 Selling and administrative expense 29.80 90.00 Margin per drum $ 59.00 Management…
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