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# Sara’s Salsa Company produces its condiments in two types: Extra Fine for restaurant customers and Family...

###### 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

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