70.2K

Verified Solution

Link Copied!

Saras 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 companys production support activities follow. Process Activity Overhead cost Driver Quantity Department 1 Mixing $ 7,000 Machine hours 2,900 Cooking 16,200 Machine hours 2,900 Product testing 114,500 Batches 500 $ 137,700 Department 2 Machine calibration $ 350,000 Production runs 700 Labeling 18,500 Cases of output 140,000 Defects 9,500 Cases of output 140,000 $ 378,000 Support Recipe formulation $ 89,000 Focus groups 50 Heat, lights, and water 58,000 Machine hours 2,900 Materials handling 85,000 Container types 10 $ 232,000 Additional production information about its two product lines follows. Extra Fine Family Style Units produced 40,000 cases 100,000 cases Batches 400 batches 100 batches Machine hours 1,250 MH 1,650 MH Focus groups 32 groups 18 groups Container types 5 containers 5 containers Production runs 310 runs 390 runs 4. Using ABC, compute the total cost per case for each product type if the direct labor and direct materials cost is $11 per case of Extra Fine and $7 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 & Explanation Solved by verified expert

See Answer