PROBLEM #4 Spicy 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 its production support activities follow. Overhead Costa De Quantity Department Mwing 4500 Machine hours 1500 Cooking Product Testing 11:50 Machines 1500 Department Machine calibration Labeling Defects 2000 Cases of 20000 Go Case of up 120.000 25.000 Support Recipe formulation Heat lights and water Material handling SOD Z7000 Machine tous 6.000 Containers Additional production information about its two product lines follows. Extrane Family Style Unis produced 20.000 100.000 200 bitches 400 batches Machine hours SOMH 1000M Focus groups 3 groups 15 groups Container types containers 3corers Production runs 200 nurs 200 Required 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 combined direct materials and direct labor cost is $6 per case of Extra Fine and $5 per case of Family Style 3. If the market price of Extra Fine Salsa is $18 per case and the market price of Family Style Salsa is S9 per case, determine the gross profit per case for each product. What might management conclude about cach product line? 4. Using ABC, compute the total cost per case for each product type if the combined direct labor and direct materials cost is 56 per case of Extra Fine and $5 per case of Family Style. s. If the market price is $18 per case of Extra Fine and $9 per case of Family Style, determine the gross profit per case for each product. How should management interpret the market prices given your computations? PROBLEM #4 Spicy 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 its production support activities follow. Overhead Costa De Quantity Department Mwing 4500 Machine hours 1500 Cooking Product Testing 11:50 Machines 1500 Department Machine calibration Labeling Defects 2000 Cases of 20000 Go Case of up 120.000 25.000 Support Recipe formulation Heat lights and water Material handling SOD Z7000 Machine tous 6.000 Containers Additional production information about its two product lines follows. Extrane Family Style Unis produced 20.000 100.000 200 bitches 400 batches Machine hours SOMH 1000M Focus groups 3 groups 15 groups Container types containers 3corers Production runs 200 nurs 200 Required 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 combined direct materials and direct labor cost is $6 per case of Extra Fine and $5 per case of Family Style 3. If the market price of Extra Fine Salsa is $18 per case and the market price of Family Style Salsa is S9 per case, determine the gross profit per case for each product. What might management conclude about cach product line? 4. Using ABC, compute the total cost per case for each product type if the combined direct labor and direct materials cost is 56 per case of Extra Fine and $5 per case of Family Style. s. If the market price is $18 per case of Extra Fine and $9 per case of Family Style, determine the gross profit per case for each product. How should management interpret the market prices given your computations
