Required information

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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.

ProcessActivityOverhead costDriverQuantityDepartment 1Mixing$5,300 Machine hours1,700 Cooking 10,000 Machine hours1,700 Product testing 113,300 Batches550  $128,600   Department 2Machine calibration$290,000 Production runs800 Labeling 16,000 Cases of output130,000 Defects 10,000 Cases of output130,000  $316,000   SupportRecipe formulation$98,000 Focus groups50 Heat, lights, and water 34,000 Machine hours1,700 Materials handling 73,000 Container types10  $205,000

Additional production information about its two product lines follows.

Extra FineFamily StyleUnits produced28,000cases102,000casesBatches280batches270batchesMachine hours650MH1,050MHFocus groups20groups30groupsContainer types7containers3containersProduction runs280runs520runs


5.

If the market price is $13 per case of Extra Fine and $7 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