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Required information [The following information applies to the questions displayed below.] Saras Salsa Company produces its condiments in two types: Extra Fine for restaurant customers

Required information

[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 $ 5,700 Machine hours 2,100
Cooking 11,100 Machine hours 2,100
Product testing 113,700 Batches 750
$ 130,500
Department 2 Machine calibration $ 310,000 Production runs 500
Labeling 18,000 Cases of output 120,000
Defects 6,000 Cases of output 120,000
$ 334,000
Support Recipe formulation $ 81,000 Focus groups 50
Heat, lights, and water 42,000 Machine hours 2,100
Materials handling 77,000 Container types 7
$ 200,000

Additional production information about its two product lines follows.

Extra Fine Family Style
Units produced 32,000 cases 88,000 cases
Batches 320 batches 430 batches
Machine hours 850 MH 1,250 MH
Focus groups 40 groups 10 groups
Container types 4 containers 3 containers
Production runs 230 runs 270 runs

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 $7 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.)

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Extra fine Family Style Activity Drivers Overhead Cost Activity Drivers Activity Rate Overhead assigned Activity Drivers Overhead assigned Activity Mixing & Cooking Product testing Machine calibration Labeling & Defects Recipe formulation Heat, light and water Material handling Extra fine Family Style 5. If the market price is $17 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

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