Bluebean Inc. produces two lines of coffee cups: espresso coffee cups and travel coffee mugs. The...

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Bluebean Inc. produces two lines of coffee cups: espresso coffee cups and travel coffee mugs. The unit cost information is shown here. The company uses a traditional volume-based costing system and believes that the number of labor hours is the appropriate cost driver. Espresso Coffee Cups Travel Activity Cost Pool Selling price Direct materials Coffee Mugs 20 25 6. Direct labor 5 Units produced 10,000 units 10,000 hours 4,000 units 6,000 hours Direct labor hours Estimated total overhead costs $ 80,000 Espresso Coffee Cups Travel Coffee Mugs $5 per direct labor hour $5 per direct labor hour $30,000 Item #1 – Predetermined overhead rate Item #2 – Total manufacturing overhead allocated $50,000 Item #3 – Manufacturing cost per unit $13 Item #4 – Gross profit per unit $7 $12.50 $20.50 $7.50 Bluebean Inc. produces two lines of coffee cups: espresso coffee cups and travel coffee mugs. The unit cost information is shown here. The company uses a traditional volume-based costing system and believes that the number of labor hours is the appropriate cost driver. Espresso Coffee Cups Travel Activity Cost Pool Selling price Direct materials Coffee Mugs 20 25 6. Direct labor 5 Units produced 10,000 units 10,000 hours 4,000 units 6,000 hours Direct labor hours Estimated total overhead costs $ 80,000 Espresso Coffee Cups Travel Coffee Mugs $5 per direct labor hour $5 per direct labor hour $30,000 Item #1 – Predetermined overhead rate Item #2 – Total manufacturing overhead allocated $50,000 Item #3 – Manufacturing cost per unit $13 Item #4 – Gross profit per unit $7 $12.50 $20.50 $7.50

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