Problem 04-5A Pricing analysis with ABC and a plantwide overhead rate LO A1, A2, P1, P3 [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. Process Activity Department 1 Mixing Cooking Product testing Quantity 2,900 2,900 500 Department 2 Machine calibration Labeling Defects Overhead cost Driver $ 7,000 Machine hours 16,200 Machine hours 114,500 Batches $137,700 $350,000 Production runs 18,500 Cases of output 9,500 Cases of output $378,000 $ 89,000 Focus groups 58,000 Machine hours 85,000 Container types $ 232,000 700 140,000 140,000 Support Recipe formulation Heat, lights, and water Materials handling 50 2,900 10 Additional production information about its two product lines follows. Units produced Batches Machine hours Focus groups Container types Production runs Extra Fine 40,000 cases 400 batches 1,250 MH 32 groups 5 containers 310 runs Family Style 100,000 cases 100 batches 1,650 MH 18 groups 5 containers 390 runs Problem 04-5A Parts 1, 2 & 3 Required: 1. Using a plantwide overhead rate based on cases, compute the overhead cost that is assigned to each case of Extra Fine 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 direc cost is $11 per case of Extra Fine and $7 per case of Family Style. 3.a. If the market price of Extra Fine Salsa is $19 per case and the market price of Family Style Salsa is $12 per case, determ 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. Reg 1 Reg 2 Reg 3A Reg 38 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 ROS Reg 2 > 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 $11 per case of Extra Fine and $7 per case of Family Style. (Round your intermediate calculations and final answers to 2 decimal places.) Total cost per unit Extra Fine unit Family Style unit If the market price of Extra Fine Salsa is $19 per case and the market price of Family Style Salsa is $12 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 Problem 04.5A Part 4 4. Using ABC, compute the total cost per case for each product type of the direct labor and direct materials cost is $11 per case of Extra Fine and $7 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.) Extrafine Activity Overhead Cost Activity Drivers Overhead assigned Activity Rate Activity Drivers Mixing & Cooking Product testing Machine calibration 11111 Labeling & Defects Recipe formulation Heat, light and water Material handling Total overhead costs assigned Extra fine Family Style Extra fine Family Style Eivity Drivers Overhead assigned Activity Drivers Overhead assigned ad costs assigned amily Style 5. If the market price is $19 per case of Extra Fine and $12 per case of Family Style, determine the gross profit per case for each product. (Round your intermediate calculations and final answers to 2 decimal places.) Extra Fine Family Style
