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Required information (The following information applies to the questions displayed below.) Sara's Salsa Company produces its condiments in two types: Extra Fine for restaurant customers
Required information (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 Department 1 Activity Mixing Cooking Product testing Quantity 2,600 2,600 1,000 Department 2 Machine calibration Labeling Defects Overhead cost Driver $ 6, 200 Machine hours 12,000 Machine hours 114,200 Batches $ 132,400 $335,000 Production runs 17,000 Cases of output 7,000 Cases of output $ 359,000 $ 86,000 Focus groups 52,000 Machine hours 82,000 Container types $220,000 800 160,000 160,000 Support Recipe formulation Heat, lights, and water Materials handling 80 2,600 10 Additional production information about its two product lines follows. Units produced Batches Machine hours Focus groups Container types Production runs Extra Fine 37,000 cases 370 batches 1,100 MH 62 groups 9 containers 280 runs Family Style 123,000 cases 630 batches 1,500 MH 18 groups 1 containers 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? Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req 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
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