Question
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
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 | $ | 7,000 | Machine hours | 2,900 | |
Cooking | 16,200 | Machine hours | 2,900 | |||
Product testing | 114,500 | Batches | 500 | |||
$ | 137,700 | |||||
Department 2 | Machine calibration | $ | 350,000 | Production runs | 700 | |
Labeling | 18,500 | Cases of output | 140,000 | |||
Defects | 9,500 | Cases of output | 140,000 | |||
$ | 378,000 | |||||
Support | Recipe formulation | $ | 89,000 | Focus groups | 50 | |
Heat, lights, and water | 58,000 | Machine hours | 2,900 | |||
Materials handling | 85,000 | Container types | 10 | |||
$ | 232,000 | |||||
Additional production information about its two product lines follows.
Extra Fine | Family Style | |||
Units produced | 40,000 | cases | 100,000 | cases |
Batches | 400 | batches | 100 | batches |
Machine hours | 1,250 | MH | 1,650 | MH |
Focus groups | 32 | groups | 18 | groups |
Container types | 5 | containers | 5 | containers |
Production runs | 310 | runs | 390 | runs |
rev: 06_09_2018_QC_CS-128873
5. If the market price is $19 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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