Question
[The following information applies to the questions displayed below.] Saras Salsa Company produces its condiments in two types: Extra Fine for restaurant customers and Family
[The following information applies to the questions displayed below.] 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 |
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.)
Extra fine Family Style Activity Drivers Overhead Cost Activity Drivers Activity Rate Overhead assigned Activity Drivers Overhead assigned Activity Mixing & Cooking Product testing Machine calibration Labeling & Defects Recipe formulation Heat, light and water Material handling Extra fine Family Style
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