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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 $ 5,300 Machine hours 1,700
Cooking 10,000 Machine hours 1,700
Product testing 113,300 Batches 550
$ 128,600
Department 2 Machine calibration $ 290,000 Production runs 800
Labeling 16,000 Cases of output 130,000
Defects 10,000 Cases of output 130,000
$ 316,000
Support Recipe formulation $ 98,000 Focus groups 50
Heat, lights, and water 34,000 Machine hours 1,700
Materials handling 73,000 Container types 10
$ 205,000

Additional production information about its two product lines follows.

Extra Fine Family Style
Units produced 28,000 cases 102,000 cases
Batches 280 batches 270 batches
Machine hours 650 MH 1,050 MH
Focus groups 20 groups 30 groups
Container types 7 containers 3 containers
Production runs 280 runs 520 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 $4 per case of Extra Fine and $3 per case of Family Style. 3.a. If the market price of Extra Fine Salsa is $13 per case and the market price of Family Style Salsa is $7 per case, determine the gross profit per case for each product. 3.b. What might management conclude about the Family Style Salsa product line?

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4. Using ABC, compute the total cost per case for each product type if the direct labor and direct materials cost is $4 per case of Extra Fine and $3 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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Complete this question by entering your answers in the tabs below. Req 1 Req 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.) Plantwide overhead rate per case Reg 1 Req 2 > Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req 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 $4 per case of Extra Fine and $3 per case of Family Style. (Round your intermediate calculations and final answers to 2 decimal places.) Total cost per unit Extra Fine unit Family Style unit Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req Req 3B If the market price of Extra Fine Salsa is $13 per case and the market price of Family Style Salsa is $7 per case, determine the gross profit per case for each product. (Round your intermediate calculations and final answers to 2 decimal places.) Extra Fine Family Style Req2 Req 3B Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req Req 3B What might management conclude about the Family Style Salsa product line? Conclude about the Family Style Salsa product line Req 3A Reg 3B > Activity Overhead Cost Activity Drivers Activity Rate Mixing & Cooking Product testing Machine calibration Labeling & Defects Recipe formulation Heat, light and water Material handling Extra fine Extra fine Family Style Activity Drivers Overhead assigned Activity Drivers Overhead assigned Family Style 5. If the market price is $13 per case of Extra Fine and $7 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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