Question
Required information Skip to question [The following information applies to the questions displayed below.] Saras Salsa Company produces its condiments in two types: Extra Fine
Required information
Skip to question
[The following information applies to the questions displayed below.] 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 | $ | 6,200 | Machine hours | 2,600 | |
Cooking | 12,000 | Machine hours | 2,600 | |||
Product testing | 114,200 | Batches | 1,000 | |||
$ | 132,400 | |||||
Department 2 | Machine calibration | $ | 335,000 | Production runs | 800 | |
Labeling | 17,000 | Cases of output | 160,000 | |||
Defects | 7,000 | Cases of output | 160,000 | |||
$ | 359,000 | |||||
Support | Recipe formulation | $ | 86,000 | Focus groups | 80 | |
Heat, lights, and water | 52,000 | Machine hours | 2,600 | |||
Materials handling | 82,000 | Container types | 10 | |||
$ | 220,000 | |||||
Additional production information about its two product lines follows.
Extra Fine | Family Style | |||
Units produced | 37,000 | cases | 123,000 | cases |
Batches | 370 | batches | 630 | batches |
Machine hours | 1,100 | MH | 1,500 | MH |
Focus groups | 62 | groups | 18 | groups |
Container types | 9 | containers | 1 | containers |
Production runs | 280 | runs | 520 | runs |
4. Using ABC, compute the total cost per case for each product type if the direct labor and direct materials cost is $9 per case of Extra Fine and $8 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.)
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started