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Tastyfreeze Company is a small producer of fruit-flavored frozen desserts. For many years, its products have had strong regional sales because of brand recognition; however
Tastyfreeze Company is a small producer of fruit-flavored frozen desserts. For many years, its products have had strong regional sales because of brand recognition; however other companies have begun marketing similar products in the area, and price competition has become increasingly important. Dan O'Mara, the company's controller, is planning to implement a standard cost system for Tastyfreeze and has gathered considerable information from his coworkers about production and materials requirements for Tastyfreeze's products. Dan believes that the use of standard costs will allow the company to improve cost control, make better pricing decisions, and enhance strategic management Tastyfreeze's most popular product is raspberry sherbet. The sherbet is produced in 10-gallon batches, each of which requires 6 quarts of good raspberries and 10 gallons of other ingredients. The fresh raspberries are sorted by hand before they enter the production process. Because of imperfections in the raspberries and normal spoilage. 1 quart of berries is discarded for every 4 accepted. The standard direct labor time for sorting to obtain 1quart of acceptable raspberries is 6 minutes. The acceptabl raspberries are then blended with the other ingredients: blending requires 18 minutes of direct labor time per batch. After blending, the sherbet is packaged in quart containers, Dan has gathered the followin price information
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