Problem 17-2B Using plantwide overhead rate to allocate overhead cost, and compute overhead cost per unit and gross profit per unit P1 Sara's Salsa produces salsa in two types: Extra Fine for restaurants and Family Style for home use. The company budgets $280,000 of overhead cost and 40,000 direct labor hours. Additional information follows. Per Unit (case) Extra Fine Family Style Selling Price $64 53 Direct Materials $18 16 Direct Labor $30 25 Required 1. Compute a single plantwide overhead rate assuming the company allocates overhead cost based on 40,000 direct labor hours. 2. Extra Fine uses 2 direct labor hours per unit and Family Style uses 1.5 direct labor hours per unit. Compute the overhead cost per unit for each product. 3. Compute the product cost per unit for each product. 4. For each product, compute the gross profit per unit (selling price per unit minus the product cost per unit).

Problem 17-2B Using plantwide overhead rate to allocate overhead cost, and compute overhead cost per unit and gross profit per unit P1 Sara's Salsa produces salsa in two types: Extra Fine for restaurants and Family Style for home use. The company budgets $280,000 of overhead cost and 40,000 direct labor hours. Additional information follows. Per Unit (case) Extra Fine Family Style Selling Price $64 53 Direct Materials $18 16 Direct Labor $30 25 Required 1. Compute a single plantwide overhead rate assuming the company allocates overhead cost based on 40,000 direct labor hours. 2. Extra Fine uses 2 direct labor hours per unit and Family Style uses 1.5 direct labor hours per unit. Compute the overhead cost per unit for each product. 3. Compute the product cost per unit for each product. 4. For each product, compute the gross profit per unit (selling price per unit minus the product cost per unit).

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter18: Activity-Based Costing

Section: Chapter Questions

Problem 2ADM

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