Bent Tree Coffee purchases green coffee beans from various suppliers and then roasts the coffee beans in its roasting facility. The roasted beans are sold in 20?-pound cases to grocery stores and restaurants for $75 per case. Each case of roasted coffee beans requires 20 pounds of unroasted green coffee beans. The company can purchase the green coffee? beans, including?freight-in and purchase? discounts, for $2.00 per pound. Each case of roasted coffee beans requires 0.10 hours of direct labor in the production process. Direct laborers are paid $23 per? hour, which includes payroll taxes and employee benefits. The company uses machine hours to allocate its manufacturing overhead. Each case of roasted coffee beans requires 0.20 machine hours to produce. The company expects to produce 500,000 cases of roasted coffee beans in the upcoming year. At this production? volume, the company expects total variable manufacturing overhead to be $3,000,000 for the year. The company also expects to incur $50,000 of fixed manufacturing overhead per? month, or $600,000 for the year.
Read the requirements.
1.What is the standard cost of producing one 20?-pound case of roasted coffee beans?
2.What is the standard gross profit per 20?-pound case of roasted coffee? beans?
3.How often should the company reassess standard quantities and standard prices for? inputs?
