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. Proce33 Department 1 Quantity Activity Mixing Cooking Product testing Driver Machine hours Machine hours Batches 1,200 Department 2 Machine calibration Labeling Defects Overhead cost $ 4,800 11,100 112,800 $ 128,700 $265,000 10,000 6,500 $281,500 $ 93,000 30,000 68,000 $191,000 Production runs Cases of output Cases of output 165,000 165,000 Support Recipe formulation Heat, lights, and water Materials handling Focus groups Machine hours Container types 1,200 Additional production information about its two product lines follows. Units produced Batches Machine hours Focus groups Container types Production runs Extra Fine 23,000 cases 230 batches 400 MH 30 groups 7 containers 230 runs Family Style 142,000 cases 520 batches 800 MH 30 groups 3 containers 170 runs 4. Using ABC, compute the total cost per case for each product type if the direct labor and direct materials cost is $6 per case of Extra Fine and $5 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.)

Answer 1

Activity		Oh Cost	Drivers		Activity		Extra Fine	Family Style
					rate		Activity	OH cost	Activity	Oh cost
Mixing and cooking	15900	1200	MH	13.25	per MH	400	5300	800	10600
Product Testing	112800	750	Batches	150.4	per Batches	230	34592	520	78208
machine Calibration	265000	400	Runs	662.5	per Runs	230	152375	170	112625
labelling and Defects	16500	165000	Output	0.1	per Output	23000	2300	142000	14200
Recipe Formulation	93000	60	Groups	1550	per Groups	30	46500	30	46500
Heat light and water	30000	1200	MH	25	per MH	400	10000	800	20000
Material handling	68000	10	Container type	6800	per Container type	7	47600	3	20400
						Total Overheads	298667		302533
						Divide: Units	23000		142000
						OH cost per case	12.99		2.13
							Extra Fine	Family Stype
				Direct labor and material	6	5
				Overheads cost		12.99	2.13
				Unit cost			18.99	7.13