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. Рrocess Activity Overhead cost $ 5,500 11,600 113,500 $130,600 $300,000 Driver Machine hours Machine hours Quantity 1,900 1,900 Department 1 Mixing Cooking Product testing Batches 1,000 Department 2 Machine calibration Labeling Defects Production runs Cases of output Cases of output 400 15,000 9,000 $324,000 120,000 120,000 Support Recipe formulation Heat, lights, and water Materials handling $100,000 38,000 75,000 $213,000 Focus groups Machine hours Container types 40 1,900 12 Additional production information about its two product lines follows. Extra Fine 30,000 cases 300 batches Fanily Style 90,000 cases 700 batches 1,150 MH Units produced Batches Machine hours Focus groups Container types Production runs 750 MH 30 groups 9 containers 210 runs 10 groups 3 containers 190 runs

Answer 1

Extra Fine	Loss	($ 2.69 )	( $15 - $ 17.69)
Family Style	Profit	$ 1.48	( $ 10 - $ 8.52)

W.Note-

					Extra fine		Family Style
Activity	Overhead Cost	Activity Drivers		Activity Rate		Activity Drivers	Overhead assigned	Activity Drivers	Overhead assigned
Mixing and cooking	17100	1900	machine hours	9	per machine hours	750	6750	1150	10350
Production testing	113500	1000	batches	113.5	per batch	300	34050	700	79450
Machine calibration	300000	400	runs	750	per run	210	157500	190	142500
Labeling and Defects	24000	120000	cases	0.2	per case	30000	6000	90000	18000
Recipe formulation	100000	40	groups	2500	per group	30	75000	10	25000
Heat, light and water	38000	1900	machine hours	20	per machine hour	750	15000	1150	23000
Materials handling	75000	12	container types	6250	per type	9	56250	3	18750
						Total overhead costs assigned	350550	Total overhead costs assigned	317050
						Total units produced	30000	Total units produced	90000
						Overhead cost per unit	11.69	Overhead cost per unit	3.52
							Activity Drivers	Activity Drivers
						Direct materials and direct labor	6	5
						Overhead	11.69	3.52
						Total cost/case	17.69	8.52