Required information 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. Process Activity Overhead cost Driver Quantity Department 1 Mixing $ 4,500 Machine hours 1,500 Cooking 11,250 Machine hours 1,500 Product testing 1:12,500 Batches 600 $ 128, 250 Department 2 Machine calibration $ 250,000 Production runs 400 Labeling 12,000 Cases of output 120,000 Defects 6,000 Cases of output 120,000 $ 268,000 Support Recipe formulation $ 90,000 Focus groups 45 Heat, lights, and water 27,000 Machine hours 1,500 Materials handling 65,000 Container types 8 $ 182,000 Additional production information about its two product lines follows. Extra Fine Family Style Units produced 20,000 cases 100,000 cases Batches 200 batches 400 batches Machine hours 500 MH 1,000 MW Tocus groups 30 groups 15 groups Container types 5 containers 3 containers Production runs 200 runs 200 runs Problem 17-5A Parts 1, 2 & 3 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? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req 3A Req 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 final answer to 2 decimal places.) Plantwide overhead rate per case Reg Reg 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. (Round your intermediate calculations and final answers to 2 decimal places.) Total cost per unit Extra Fine unit unit Family Style 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. (Round your intermediate calculations and final answers to 2 decimal places.) Extra Fine Family Style 5. 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. (Round your intermediate calculations and final answers to 2 decimal places.) Extra Fine Family Style
