Required information The following information applies to the questions displaye

Question

Required information The following information applies to the questions displayed below. Sara's 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 company's production support activities follow Overhead cost Activity Driver Quantity Process Department Mixing $ 5,800 Machine hours 2,200 Cooking Product testing 12,900 Machine hours 2,200 1,000 113,800 Batches $132,500 Department Machine $315,000 Production calibration Labeling Defects runs Cases of output 500 145,000 145,000 20,000 9,000 Cases of output $344,000 Support Recipe formulation ? 82,000 Focus groups 40 Heat, lights, and water 33,000 Machine hours 2,200 Materials handling 78,000 Container types $193,000 Additional production information about its two product lines follows. Extra Fine Family Style 112,000 cases Units produced Batches Machine hours Focus groups Container types Production runs 33,000 cases 330 batches 670 batches 900 MH 1,300 MH 30 groups 10 groups 6 containers 2 containers 240 runs 260 runs 4. Using ABC, compute the total cost per case for each product type if the direct labor and direct materials cost is $9 per case of Extra Fine and $8 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.)

Explanation / Answer

Activity Overhead Cost Activity Drivers Activity Rate Activity Drivers Overhead assigned Activity Drivers Overhead assigned Mixing and cooking $18,700 2,200 machine hours $8.50 per machine hours 900 $7,650 1,300 11,050 Product testing $113,800 1000 batches $113.80 per batch 330 $37,554 670 76,246 Machine calibration $315,000 500 runs $630.00 per run 240 $151,200 260 163,800 Labeling and Defects $20,000 145,000 cases $0.14 per case 33,000 $4,552 112,000 15,448 Recipe formulation $82,000 40 groups $2,050.00 per group 30 $61,500 10 20,500 Heat, light and water $33,000 2,200 machine hours $15.00 per machine hour 900 $13,500 1,300 19,500 Materials handling $78,000 8 container types $9,750.00 per type 6 $58,500 2 19,500 Total overhead costs assigned $334,456 Total overhead costs assigned $326,044 Total units produced 33,000 Total units produced 112,000 Overhead cost per unit $10.14 Overhead cost per unit $2.91

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