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. Overhead Process Activity cost Driver Quantity Department Mixing $ 6,000 1 Machine hours 2,400 Cooking 10,800 Machine hours 2.400 Product testing 114,000 Batches 75e $130,00 Department Machine $325,000 Production 650 2 calibration runs Labeling 18,000 Cases of 160.ee output Defects 6,000 Cases of 160.ee output $349,00 Support Recipe formulation $ 84,000 Focus groups se Heat, lights, and 42.000 water Machine hours 2,400 Materials handling 80, eee Container 10 types $206,000 Additional production information about its two product lines follows Extra Fine Family Style Units 35,000 cases 125,000 cases produced Batches 350 batches 488 batches Machine hours 1,000 MH 1,400 MH Focus groups 34 groups 16 groups Container 4 containers 6 containers types Production 260 runs runs 390 runs 4. Using ABC, compute the total cost per case for each product type of the direct labor and direct materials cost is $7 per case of Extra Fine and $6 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.) Overhead Cost Extra fine Activity Drivers Activity Drivers Activity Rate Overhead assigned Family Style Overhead Activity Drivers assigned Activity Mixing & Cooking Product testing Machine calibration Labeling & Defects Recipe formulation Heat, light and water Material handing Extra fine Family Style

Answer 1

										Extra fine			Family style
			overhead	Avtivity Driver			Activity rate			Activity Drivers		overhead	Activity Drivers		overhead
4)	Activity		cost									assinged			assinged
	Mixing & cooking		16,800	2,400	machine hours		7	per machine hour		1000		7000	1400		9800
	product testing		114,000	750	Batches		152	per batch		350		53200	400		60800
	Machine Calibration		325,000	650	production run		500	per production run		260		130000	390		195000
	Labeling & Defects		24,000	160,000	cases of output		0.15	per case		35000		5250	125,000		18750
	Recipe formulation		84,000	50	Focus groups		1680	per focus group		34		57120	16		26880
	heat,light and water		42,000	2,400	machine hours		17.5	per machine hour		1000		17500	1400		24500
	Material handling		80,000	10	container type		8000	per container type		4		32000	6		48000
			685,800							total OH cost assign		302070	total OH cost assign		383730
										total units produced		35,000	total units produced		125,000
										oh cost per unit		8.63	oh cost per unit		3.07
									Extra	Family
									fine	Style
						Direct materials & direct labor			7.00	6.00
						overhead			8.63	3.07
						tota cost/case			15.63	9.07