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, overheadcosts, and drivers associated with these two manufacturing processes and the company's production support activities follow.

Process Activity Overhead cost Driver Quantity Department 1 Mixing $ 5,600 Machine hours 2,000 Cooking 11,200 Machine hours 2,000 Product testing 113,600 Batches 800 $ 130,400 Department 2 Machine calibration $ 305,000 Production runs 400 Labeling 17,500 Cases of output 110,000 Defects 4,500 Cases of output 110,000 $ 327,000 Support Recipe formulation $ 80,000 Focus groups 80 Heat, lights, and water 38,000 Machine hours 2,000 Materials handling 76,000 Container types 8 $ 194,000

Additional production information about its two product lines follows.

Extra Fine Family Style Units produced 31,000 cases 79,000 cases Batches 310 batches 490 batches Machine hours 800 MH 1,200 MH Focus groups 55 groups 25 groups Container types 6 containers 2 containers Production runs 220 runs 180 runs

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 $7 per case of Extra Fine and $6 per case of Family Style.

3.a. If the market price of Extra Fine Salsa is $16 per case and the market price of Family Style Salsa is $11 per case, determine the gross profit per case for each product.

3.b. What might management 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 $7 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.)

5. If the market price is $16 per case of Extra Fine and $11 per case of Family Style, determine the gross profit per case for each product. (Round your intermediate calculations and finalanswers to 2 decimal places.)