Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

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 Activity Department Mixing 1 Cooking Product testing Overhead cost $ 5,100 10,800 113, 100 $129,000 Driver Machine hours Machine hours Batches Quantity 1,500 1,500 1,000 $280,000 700 Department Machine 2 calibration Labeling 10,000 Production runs Cases of output Cases of output 145,000 145,000 Support 75 Defects 4,500 $294,500 Recipe formulation $ 96,000 Heat, lights, and water 33,000 Materials handling 71,000 $200,000 1,500 Focus groups Machine hours Container types 8 Additional production information about its two product lines follows. Extra Fine Family Style Units 26,000 cases 119,000 cases produced Batches 260 batches 740 batches Machine hours 550 MH 950 MH Focus groups 50 groups 25 groups Container 5 containers 3 containers types Production 260 runs 440 runs 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 $6 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 $10 per case, determine the gross profit per case for each product. 3.b. What might management conclude about the Family Style Salsa product line? 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.) Show less Plantwide overhead rate per case Req 1 Reg 2 Req 3A Req 3B 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 $6 per case of Family Style. (Round your intermediate calculations and final answers to 2 decimal places.) Show less A Total cost per unit Extra Fine unit Family Style unit If the market price of Extra Fine Salsa is $18 per case and the market price of Family Style Salsa is $10 per case, determine the gross profit per case for each product. (Round your intermediate calculations and final answers to 2 decimal places.) Show less Extra Fine Family Style What might management conclude about the Family Style Salsa product line? Conclude about the Family Style Salsa product line 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 $6 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.) Extra fine Overhead Cost Activity Drivers Activity Rate Activity Drivers Overhead assigned Family Style Overhead Activity Drivers 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 $18 per case of Extra Fine and $10 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Assurance Services

Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Strawser

2nd Edition

0073128244, 9780073128245

More Books

Students also viewed these Accounting questions