Organic Grounds produces two brands of coffee: Star and Bucks. The two coffees are produced in one factory using the same production process. The only difference between the two coffees is the cost of the unroasted coffee beans. The following data are available for February
|
|
Star
|
Bucks
|
Total
|
|
Number of pounds of coffee produced
|
5,000
|
20,000
|
25,000
|
|
Cost of unroasted beans and packaging per pound
|
$4
|
$6
|
|
|
Other costs:
|
|
|
|
|
Direct labor
|
|
|
$ 50,000
|
|
Indirect materials
|
|
|
15,000
|
|
Other overhead
|
|
|
100,000
|
Required
Organic Grounds uses operations costing and assigns conversion costs based on the number of pounds of coffee produced. Compute the cost unit of each brand of coffee produced in February.