Think about a Starbucks cafe and a pound of bagged ground coffee sold in that cafe (assume that the beans are ground in the store at the time of the sale).

a) What costs are included in the cost of a pound of bagged ground coffee sold at this cafe? Seperate these costs into direct materials, direct labor, and overhead costs.

b) What are the direct costs of a pound of bagged ground coffee (to be sold to consumers), assuming that the cost object is this location? What are the indirect costs of the same pound of bagged ground coffee for this location?

c) Assume now that the cost object is the Starbucks corporation itself. What costs of that bagged ground coffee will now be reclassified as direct (as compared to using another location as the cost object)?