Coffee Bean Incorporated $($CBI$)$ processes and distributes a variety of coffee. CBI buys coffee beans from around the world and roasts, blends, and packages them for resale. Currently, the firm offers $15$ 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.

Some of the coffees are very popular and sell In large volumes; a few of the newer brands have very low volumes. CBI prices its coffee

at full product cost, Including allocated overhead, plus a markup of $30\%.$ If its prices for certain coffees are significantly higher than the

market, CBI lowers its prices. The company competes primarlly on the quality of its products, but customers are price conscious as

well.

Data for the current budget include factory overhead of $$2,970,000,$ which has been allocated on the basis of each product's direct

labor cost. The budgeted direct labor cost for the current year totals $$595,000.$ The firm budgeted $$5,500,000$ for purchase and use

of direct materlals $($mostly coffee beans$).$

The budgeted direct costs for $1-$pound bags of two of the company's many products are as follows:

CBl$\text{'}$s controller, Mona Clin, believes that its current product costing system could be providing misleading cost information. She has

developed this analysls of the current year's budgeted factory overhead costs:

Data regarding the current year's production of just two of Its lines, Mona Loa and Malaysian, follow. There is no beginning or ending

direct materlals inventory for elther of these coffees.

Answer is complete but not entirely correct.

Complete this question by entering your answers in the tabs below.

Req $1A$

Using an activity$-$based costing approach, develop a new product cost for $1$ pound of Mona Loa coffee and $1$ pound of

Malaysian coffee. Allocate all overhead costs to the $100,500$ pounds of Mona Loa and the $1,950$ pounds of Malaysian.

Note: Round intermediate calculations to $2$ decimal places.