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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. Process Department 1 Activity Mixing Cooking Product testing Quantity 2,700 2,700 600 Department 2 Machine calibration Labeling Defects Overhead cost Driver $ 4,600 Machine hours 11,600 Machine hours 114,300 Batches $130,500 $340,000 Production runs 20,000 Cases of output 7,000 Cases of output $367,000 $ 87,000 Focus groups 54,000 Machine hours 83,000 Container types $224,000 800 135,000 135,000 Support Recipe formulation Heat, lights, and water Materials handling 75 2,700 Additional production information about its two product lines follows. Units produced Batches Machine hours Focus groups Container types Production runs Extra Fine 38,000 cases 380 batches 1, 150 MH 64 groups 3 containers 290 runs Family Style 97,000 cases 220 batches 1,550 MH 11 groups 5 containers 510 runs Required: 1. Using a plantwide overhead rate based on cases, compute the overhead cost that is assigned to each case of Extra Fine Salsa and each case of Family Style Salsa. 2. Using the plantwide overhead rate, determine the total cost per case for the two products if the direct materials and direct labor cost is $10 per case of Extra Fine and $8 per case of Family Style. 3.a. If the market price of Extra Fine Salsa is $18 per case and the market price of Family Style Salsa is $13 per case, determine the gross profit per case for each product. 3.b. What might management conclude about the Family Style Salsa product line? Complete this question by entering your answers in the tabs below. Using a plantwide overhead rate based on cases, compute the overhead cost that is assigned to each case of Extra Fine Salsa and each case of Family Style Salsa. (Round your intermediate calculations and final answers to 2 decimal places.) Plantwide overhead rate per case Using the plantwide overhead rate, determine the total cost per case for the two products if the direct materials and direct labor cost is $10 per case of Extra Fine and $8 per case of Family Style. (Round your intermediate calculations and final answers to 2 decimal places.) Extra Fine Family Style Total cost per unit unit unit If the market price of Extra Fine Salsa is $18 per case and the market price of Family Style Salsa is $13 per case, determine the gross profit per case for each product. (Round your intermediate calculations and final answers to 2 decimal places.) Extra Fine Family Style What might management conclude about the Family Style Salsa product line? Conclude about the Family Style Salsa product line gross profit per case for each product. 3.b. What might management conclude about the Family Style Salsa product line
