Question

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	Activity	Overhead cost			Driver	Quantity
Department 1	Mixing	$	4,800		Machine hours	1,200
	Cooking		11,100		Machine hours	1,200
	Product testing		112,800		Batches	750
		$	128,700
Department 2	Machine calibration	$	265,000		Production runs	400
	Labeling		10,000		Cases of output	165,000
	Defects		6,500		Cases of output	165,000
		$	281,500
Support	Recipe formulation	$	93,000		Focus groups	60
	Heat, lights, and water		30,000		Machine hours	1,200
	Materials handling		68,000		Container types	10
		$	191,000

Additional production information about its two product lines follows.

	Extra Fine		Family Style
Units produced	23,000	cases	142,000	cases
Batches	230	batches	520	batches
Machine hours	400	MH	800	MH
Focus groups	30	groups	30	groups
Container types	7	containers	3	containers
Production runs	230	runs	170	runs

Problem 04-5A Part 5

5. If the market price is $17 per case of Extra Fine and $8 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

Answer 1

Grons profit per case for each product Answer ) Page: No 0 5 NA Mixing activity rate $4800 1200 $4 per machine hower machine hours $11,100 1200 $9,25 per Cooking activily viate batch Procluct testing activity sale *112,800 750 $150.4 per Machine Calibration activily rate $265000 400 $662.5 per production yon $10,000 165000 $0.06 per case Labeling activity toc Defects activity rate $6500 165000 $0.04 per case $93000 60 Recipe formulation activily rate $ 1550 per focus group $30000 Heat, lights Ee water activity rate = = $25 per machine how $68000 Materials handling activity rate = $6800 por Container 1200 10

NO 2 Page 1 Extra Fine 400884 $ 1600 Mixing Cooking Family style 800X $4 $3200 800 x $9.25 = $7400 -- 400x$9,25 = $3700 Product testing 230 x $150.4 = $34,592 520 x $150.4 = $78,208 Trachine Calibration 230 x $662.5 = $152,375 170x866215 = $112,625 habeling 23000 x0.06 = $1380 142000 X0106 = $8520 Detects 23000 40.04 = $920 142000 X 0.04 = $5680 Recipe formular 30 x $1550 = $ 46500 30 x $1550 = $46500 -on Heat, lights and 400 x$25 = $ 10,000 800 $ 25 $20,000 water Material handling + x $6800 = $44600 3x$6800 = $ 20,406 Total costs $298,667 $302,533 Total cases 23000 142000 cost $12.99 $2.13 Assume overhead cost per case as total cost per case as there is no direct material E labor per Extra fine groms profit per cass = $14-$12.99 = $4.01 per case case

Page: No ③ Family style grons profit per case = $8-$2.13 = $5.87 Extra fine $4.01 family style Profil $5.87