Contra Costa Coffee Roasting Company of Alamo, California roasts two unique blends of coffee beans: Jump Start and Mid-Dy Break. These two unique blends are sold and shipped exclusively to gourmet coffee shops across the country.

Jump Start Mid-Day Break

Signature Blend Afternoon Blend Total Cost Roasting Machine Setups 600 100 $36,000

Roasting Inspections 300 50 $12,000

Labor hours 650 250

The company is considering switching from one overhead rate based on labor hours to "ABC" (Activity-Based Costing).

Instructions

Perform the following analyses for these two components of overhead:

1. Compute total roasting machine setups and roasting inspection costs assigned to each product, using a single overhead rate.
2. Compute total machine setups and inspection costs assigned to each product, using activity-based costing.

Answer rating: 100% (QA)

To perform the analysis we need to calculate the overhead costs assigned to each product using both the single overhead rate method and the activityba... View the full answer