1 answer

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

Answers

Grons profit per case for each product Answer ) Page: No 0 5 NA Mixing activity rate $4800 1200 $4 per machine hower machineNO 2 Page 1 Extra Fine 400884 $ 1600 Mixing Cooking Family style 800X $4 $3200 800 x $9.25 = $7400 -- 400x$9,25 = $3700 ProduPage: No ③ Family style grons profit per case = $8-$2.13 = $5.87 Extra fine $4.01 family style Profil $5.87

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