Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

[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.)

image text in transcribed

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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Principles And Techniques

Authors: Prof. A.R. Solanki

1st Edition

9350533979, 9789350533970

More Books

Students also viewed these Accounting questions

Question

4. Why is it that correlations do not imply causation?

Answered: 1 week ago