Java+Sources+Case - 3 66 C hapter 8 n. L!J c . . CASE 8 8-5...

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366 Chapter 8 CASE 88-5 Activity-Based Costing and Pricing [L07] Java Source, Inc. (JSI), is a processor and distributor of a variety of blends of coffee. The company 7 .•. buys coffee beans from around the world and roasts, blends, and packages them for resale. JSI of-, n . . . c fers a large variety of different coffees that it sells to gounnet shops in one-pound bags. The major"; L!J cost of the coffee is raw materials. However, the company's predominantly automated roasting,,; blending, and packing processes require a substantial amount of manufacturing overhead. The\ company uses relatively little direct labor." Some of JSI's coffees are very popular and sell in large volumes, while a few of the newe~t blends sell in very low volumes. lSI prices its coffees at manufacturing cost plus a markup of 25%,r with some adjustments made to keep the company's prices competitive. ",; For the coming year, lSI's budget includes estimated manufacturing overhead cost o(i $2,200,000. JSI assigns manufacturing overhead to products on the basis of direct labor-hours. The
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This note was uploaded on 02/10/2011 for the course UGBA 102B taught by Professor Fan during the Spring '08 term at University of California, Berkeley.

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Java+Sources+Case - 3 66 C hapter 8 n. L!J c . . CASE 8 8-5...

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