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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
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 Overhead cost Driver Department 1 Mixing Quantity $ 4,500 Machine hours 1,500 Cooking 11,250 Machine hours 1,500 Product testing 112,500 Batches 600 $128, 250 Department 2 Machine calibration $250,000 Production runs 400 Labeling 12,000 Cases of output 120,000 Defects 6,000 Cases of output 120,000 $268,000 Support Recipe formulation $ 90,000 Focus groups 45 Heat, lights, and water 27,000 Machine hours 1,500 Materials handling 65,000 Container types $182,000 8 Additional production information about its two product lines follows. Extra Fine Family Style Units produced 20,000 cases 100,000 cases Batches 200 batches 400 batches Machine hours 500 MH 1,000 MH Focus groups 30 groups 15 groups Container types 5 containers 3 containers Production runs 200 runs 200 runs 4. Using ABC, compute the total cost per case for each product type if the direct labor and direct materials cost is $6 per case of Extra Fine and $5 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 Overhea assigne Activity Mixing & Cooking Product testing Machine calibrwion Labeling & Defects Recipe formulation Heat, light and water Material handling Extrafine Family Style
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