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question 12 Saras Salsa Company produces its condiments in two types: Extra Fine for restaurant customers and Family Style for home use. Salsa is prepared

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Saras 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 companys production support activities follow.

Process Activity Overhead cost Driver Quantity
Department 1 Mixing $ 4,700 Machine hours 2,800
Cooking 15,600 Machine hours 2,800
Product testing 114,400 Batches 650
$ 134,700
Department 2 Machine calibration $ 345,000 Production runs 750
Labeling 18,000 Cases of output 180,000
Defects 9,000 Cases of output 180,000
$ 372,000
Support Recipe formulation $ 88,000 Focus groups 40
Heat, lights, and water 42,000 Machine hours 2,800
Materials handling 84,000 Container types 8
$ 214,000

Additional production information about its two product lines follows.

Extra Fine Family Style
Units produced 39,000 cases 141,000 cases
Batches 390 batches 260 batches
Machine hours 1,200 MH 1,600 MH
Focus groups 30 groups 10 groups
Container types 4 containers 4 containers
Production runs 300 runs 450 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 $8 per case of Extra Fine and $9 per case of Family Style. 3.a. If the market price of Extra Fine Salsa is $14 per case and the market price of Family Style Salsa is $12 per case, determine the gross profit per case for each product. 3.b. What might management conclude about the Family Style Salsa product line?

5. If the market price is $14 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 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.) Family Style Extra fine Overhead Overhead Activity Drivers Activity Rate Activity Drivers Activity Overhead Cost Activity Drivers assigned assigned Mixing & Cooking Product testing Machine calibration Labeling & Defects Recipe formulation Heat, light and water Material handling Extra fine Family Style Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B 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 Req 1 Req 2

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