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Orangehappy valentine's dayWednesday, December 9, 2015Connect - Managerial Accounting Exam (Ch 4-6)Questions 1-3[The following information applies to the questions displayed below.]Sara’s Salsa Company produces its condiments in two types: Extra Fine for restaurant customers andFamily Style for home use. Salsa is prepared in department 1 and packaged in department 2. Theactivities, overhead costs, and drivers associated with these two manufacturing processes and itsproduction support activities follow.ProcessActivityOverhead costDriverQuantityDepartment 1Mixing$6,000Machine hours2,400Cooking10,800Machine hours2,400Product testing114,000Batches750$130,800Department 2Machine calibration$325,000Production runs650Labeling18,000Cases of output160,000Defects6,000Cases of output160,000
$349,000SupportRecipe formulation$84,000Focus groups50Heat, lights, and water42,000Machine hours2,400Materials handling80,000Container types10$206,000Additional production information about its two product linesfollows.Extra FineFamily StyleUnits produced35,000 cases125,000 casesBatches350 batches400 batchesMachine hours1,000 MH1,400 MHFocus groups34 groups16 groupsContainer types4 containers6 containersProduction runs260 runs390 runs1.Required:1.Using a plantwide overhead rate based on cases, compute the overhead cost that is assigned toeach case of Extra Fine Salsa and each case of Family Style Salsa.(Round your intermediatecalculations and final answers to 2 decimal places.)
2.Using the plantwide overhead rate, determine the total cost per unit for the two products if thedirect materials and direct labor cost is $7 per case of Extra Fine and $6 per case of FamilyStyle.(Round your intermediate calculations and final answers to 2 decimal places.)
Total cost per unitExtra Fine$11.29 unitFamily Style$10.29 unit4.29+74.29+63.1Assume the market price of Extra Fine Salsa is $15 per case and the market price of FamilyStyle Salsa is $10 per case, determine the gross profit per case for each product.(Round yourintermediate calculations and final answers to 2 decimal places.)

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Managerial Accounting, Financial Accounting, Contribution Margin, Managerial Accounting Chapter, family style

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