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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 | $ | 4,600 | Machine hours | 2,700 | |
Cooking | 11,600 | Machine hours | 2,700 | |||
Product testing | 114,300 | Batches | 600 | |||
$ | 130,500 | |||||
Department 2 | Machine calibration | $ | 340,000 | Production runs | 800 | |
Labeling | 20,000 | Cases of output | 135,000 | |||
Defects | 7,000 | Cases of output | 135,000 | |||
$ | 367,000 | |||||
Support | Recipe formulation | $ | 87,000 | Focus groups | 75 | |
Heat, lights, and water | 54,000 | Machine hours | 2,700 | |||
Materials handling | 83,000 | Container types | 8 | |||
$ | 224,000 | |||||
Additional production information about its two product lines follows.
Extra Fine | Family Style | |||
Units produced | 38,000 | cases | 97,000 | cases |
Batches | 380 | batches | 220 | batches |
Machine hours | 1,150 | MH | 1,550 | MH |
Focus groups | 64 | groups | 11 | groups |
Container types | 3 | containers | 5 | containers |
Production runs | 290 | runs | 510 | runs |
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