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

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[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

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 $9 per case of Extra Fine and $8 per case of Family Style. 3.a. If the market price of Extra Fine Salsa is $17 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?

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.)

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. (Round your intermediate calculations and final answers to 2 decimal places.)

Plantwide overhead rate

per case

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 $9 per case of Extra Fine and $8 per case of Family Style. (Round your intermediate calculations and final answers to 2 decimal places.)

	Total cost per unit
Extra Fine		unit
Family Style		unit

3a.If the market price of Extra Fine Salsa is $17 per case and the market price of Family Style Salsa is $12 per case, determine the gross profit per case for each product. (Round your intermediate calculations and final answers to 2 decimal places.)