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. Process Department 1 Activity Mixing Cooking Product testing Quantity 1.900 1,900 1.000 Department 2 Machine calibration Labeling Defects Overhead cost Driver $ 5,500 Machine hours 11,600 Machine hours 113.500 Batches $ 130,600 $300,000 Production runs 15.000 Cases of output 9,000 Cases of output $324,000 $100,000 Focus groups 38,000 Machine hours 75,000 Container types $213,000 120.000 120,000 Support Recipe formulation Heat, lights, and water Materials handling 40 1.900 Additional production information about its two product lines follows Units produced Batches Machine hours Focus groups Container types Production runs Extra Fine 30,000 cases 300 batehes 750 HA 30 groups 9 containers 210 runs Family Style 90.000 cases 700 batches 1, 150 MM 10 groups 3 containers 190 runs

Answer 1

						Extra fine		Family Style
Activity	Overhead Cost	Activity Drivers		Activity Rate		Activity Drivers	Overhead assigned	Activity Drivers	Overhead assigned
Mixing and cooking	$17,100	1,900	machine hours	$9.00	per machine hours	750	$6,750	1,150	10,350
Production testing	$113,500	1000	batches	$113.50	per batch	300	$34,050	700	79,450
Machine calibration	$300,000	400	runs	$750.00	per run	210	$157,500	190	142,500
Labeling and Defects	$24,000	120,000	cases	$0.20	per case	30,000	$6,000	90,000	18,000
Recipe formulation	$100,000	40	groups	$2,500.00	per group	30	$75,000	10	25,000
Heat, light and water	$38,000	1,900	machine hours	$20.00	per machine hour	750	$15,000	1,150	23,000
Materials handling	$75,000	12	container types	$6,250.00	per type	9	$56,250	3	18,750
						Total overhead costs assigned	$350,550	Total overhead costs assigned	$317,050
						Total units produced	30,000	Total units produced	90,000
						Overhead cost per unit	$11.69	Overhead cost per unit	$3.52
					Extra fine	Family Style
				Direct materials and direct labor	$6	$5
				Overhead	$11.69	$3.52
				Total cost/case	$17.69	$8.52

wORKINGS

fic & ? À Q @ . Detine Name Calculate Now Insert Function Math More & Trig - Functions a Define Name fr Use in Formula Name Manager Create from Selection Defined Names Trace Precedents 5 Show Formulas Trace Dependents Error Checking Remove Arrows Evaluate Formula Formula Auditing Watch Window Calculation Calculate Sheet Options Calculation AutoSum Recently Financial Logical Text Date & Lookup & - Used Time Reference Time Reference Function Library 11 fi =+G14 B 2 Overhead Cost 3 =5500+11600 4 113500 5 300000 6 = 15000+9000 7 100000 8 38000 9 75000 Activity Drivers Activity Rate 1900 machine hours =+B3/C3 1000 batches =+B4/C4 400 runs =+B5/C5 120000 cases B+B6/C6 40 groups 1=+B7/C7 1900 machine hours =+B8/C8 container types =+B9/09 per machine hours per batch per run per case per group per machine hour per type H s+F14 =+G14 Activity Drivers Overhead assigned Activity Drivers 750 =+E3*G3 1150 300 =+E4*G4 700 210 =+E5*G5 190 30000 =+E6*G6 90000 30 =+E7*G7 10 =+G3 =+E8*G8 =+13 9 =+E9*G9 3 Total overhead costs assigned =SUM(H3:H9) Total overhead costs assigned Total units produced =+G6 Total units produced Overhead cost per unit =+H10/H11 Overhead cost per unit Overhead assigned =+13*E3 =+14*E4 =+15*E5 =+16*E6 =+17*E7 =+18*E8 =+19+E9 =SUM(J3:J9) =+16 =+J10/J11 I Family Style 1 Extra fine Direct materials and dire 6 Overhead =+H12 Total cost/case =+F15+F16 =+J12 =+G15+G16