Question

work 6 Saved 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 driv- associated with these two manufacturing processes and the company's production support activities follow. Process Activity Overhead coat Driver Quantity Department 1 Mixing $ 5,400 Machine hours 1,800 Cooking 11,700 Machine hours 1,800 Product testing 113.400 Batches 600 $130,500 Department 2 Machine calibration $ 295,000 Production runs 400 Labeling 16,500 Cases of output 100,000 Defects 5,500 Cases of output 100,000 $317,000 Support Recipe formulation $ 99,000 Focus groups 55 Heat, lights, and water 36,000 Machine hours 1,800 Materials handling 74,000 Container types $209,000 10 Additional production Information about its two product lines follows. Units produced Batohen Machine hors Focus groups Container types Production runs Extra Fine 29,000 cases 290 batches 700 MM 25 groups containers 200 runs Tamily Style 71.000 cases 310 batehes 1,100 M 30 groups 2 containers 200 TUR 5. If the market price is $14 per case of Extra Fine and $9 per case of Family Style, determine the gross profit per case for each product. (Round your intermediate calculations and final answers to 2 decimal places.) Extra Fine Family Style < Prev 5 of 5 Next MacBook Pro 30 888 04 DW $ FS 90 : 3 4 1 0 W R T Y U 0 S D F G H J к

Answer 1

Requirement 4 | Computation of Activity Rates and Overhead Cost per Unit Process Activity Overhead Cost Driver Department 1 Mixing Cooking Product Testing Extra Fine Quantity Activity Rate Activity Driver Overhead Incurred Assigned 1,800 $ 3.00 700 $ 2,100 1,800 $ 6.50 700 $ 4,550 600 $ 189.00 290 $ 54,810 5,400 Machine Hours 11,700 Machine Hours 113,400 Batches 130,500 $ $ $ Family Style Activity Driver Overhead Incurred Assigned 1,100 $ 3,300 1,100 $ 7,150 310 $ 58,590 $ Department 2 Machine Calibration Labeling Defects $ $ $ $ $ $ 295,000 Production Runs 16,500 Cases of Output 5,500 Cases of Output 317,000 400 100,000 100,000 737.50 0.17 0.06 200 $ 29,000 $ 29,000 $ 147,500 4,930 1,740 200 $ 71,000 $ 71,000 147,500 12,070 4,260 $ Support Receipe Formulation $ Heat, Lights and Water $ Materials Handling $ $ 99,000 Focus Groups 36,000 Machine Hours 74,000 Container Types 209,000 55 $ 1,800 $ 10 $ 1,800.00 20.00 7,400.00 25 700 8 $ A A A 45,000 14,000 59,200 30 1,100 2 A A A 54,000 22,000 14,800 $ 333,830 $ Total Overhead Cost Total Cases Produced Overhead Cost per Unit 323,670 71,000 4.56 $ 11.51 $ Extra Fine Family Style Particulars Direct Materials and Labor Overhead Cost Total Cost $ $ 11.51 11.51 $ $ 4.56 4.56 Requirement 5 Gross Profit per Case Particulars Extra Fine Price per Unit $ 14.00 Cost per Unit $ 11.51 Profit / (Loss) $ 2.49 Family Style $ 9.00 $ 4.56 $ 4.44 Explanation : The Cost include the Direct Materials and Labor which is not included in the Question. So, For getting the Profit/ (Loss), Please add the Direct Material and Labor Cost to the Overhead Cost and then deduct from the Market Price per Unit.