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Question: saras salsa company produces its condiments in two types extra...

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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 $ 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

rev: 06_09_2018_QC_CS-128873

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.)

Extra fine Family Style Overh Activity Activity Drivers Activity Drivers Overhead Cost Activity Drivers Activity Rate Mixing

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