Problem 17-5A 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. Overhead cost Driver $ 4,500 Machine hours Process Activity Quantity Department 1 Mixing Cooking Product testing 11,250 Machine hours 1,500 1,500 112,500 batches 600 $128,250 Department 2 Machine calibration Labeling $250,000 Production runs 400 Defects 12,000 6,000 Canes of output Cases of output 120,000 120,000 $268,000 Support Recipe formulation $90,000 Focus groups Heat, lights, and water 27,000 Materials handling 65,000 Machine hours Container types 45 1,500 5102.000 Additional production information about its two product lines follows. Units produced Batches Machine hours Focus groupe Container types Production runs Extra Fine 20,000 cases 200 batches 500 Family Style 100,000 cases 400 batches 1,000 M 15 groups 3 containers 30 groups 5 containers 200 runs 200 runs Problem 17-5A 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 Salsa and each case of Family Style Salsa. 2. Using the plantwide overhead rate, determine the total cost per unit for the two products if the direct materials and direct labor cost is $6 per case of Extra Fine and $5 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 $9 per case, determine the gross profit per case for each product. 3.b. What might management conclude about the Family Style Salsa product line?