Required information The following information applies to the questions displaye

Question

Required information The following information applies to the questions displayed below.] Sara's Salsa Company produces its condiments in two types: Extra Fine for restaurant customers and Family Style for home use. Salsa is prepared in department 1 and packaged in department 2. The activities, overhead costs, and drivers associated with these two manufacturing processes and the company's production support activities follow. Quantity 2,800 2,800 650 Activity Overhead cost Process Department 1 Mixing Driver $4,700 15,600 114,400 $134,700 $345,000 18,000 9,000 $372,000 $ 88,000 42,000 84,000 $214,000 Cooking Product testing Machine hours Machine hours Batches Department 2 Machine calibratiorn Labeling Defects Production runs Cases of output Cases of output 750 180,000 180,000 Recipe formulation Heat, lights, and water Materials handling 40 2,800 Support Focus groups Machine hours Container types Additional production information about its two product lines follows. Extra Fine Family Style Units produced Batches Machine hours Focus groups Container types Production runs 39,000 cases 141,000 cases 390 batches 260 batches 1,200 MH 1,600 MH 30 groups 10 groups 4 containers 300 runs 4 containers 450 runs 4. Using ABC, compute the total cost per case for each product type if the direct labor and direct materials cost is $8 per case of Extra Fine and $9 per case of Family Style. (Round your intermediate calculations to 2 decimal places. Round "Activity Rate" and "Overhead cost per unit" answers to 2 decimal places.)

Explanation / Answer

Extra Fine Family Style Activity Overhead Costs Activity Drivers Activity rate Activity Drivers Overhead Assigned Activity Drivers Overhead Assigned Mixing & Cooking             20,300                2,800 Machine Hours              7.25 Per Machine Hours                     1,200                8,700                     1,600           11,600 Product Testing          1,14,400                   650 Batches          176.00 Per Batches                         390              68,640                        260           45,760 Machine Calibration          3,45,000                   750 Production Runs          460.00 Per Production Runs                         300          1,38,000                        450       2,07,000 Labeling & Defects             27,000          1,80,000 Cases of Outputs              0.15 Per Cases of Outputs                   39,000                5,850               1,41,000           21,150 Recipe Formulation             88,000                      40 Focus Groups      2,200.00 Per Focus Groups                           30              66,000                           10           22,000 Heat, light & water             42,000                2,800 Machine Hours            15.00 Per Machine Hours                     1,200              18,000                     1,600           24,000 Material Handling             84,000                        8 Container Types    10,500.00 Per Container Types                              4              42,000                             4           42,000 Total          3,47,190 Total       3,73,510 Total Cases Produced              39,000 Total Cases Produced       1,41,000 Overhead per Case                  8.90 Overhead per Case                2.65 Extra Fine Family Style Direct Material & Labour                        8.00                  9.00 Overhead Cost                        8.90                  2.65 Total Cost                     16.90                11.65 Selling Price                     14.00                12.00 Profit / (loss) per case                     (2.90)                  0.35

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