Answer:
Extra Fine= $26
Family Style= $12.98
Explanation:
<u>First, we need to calculate the activities rate for each department and support:</u>
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Department 1:
Mixing= 4,500/1,500= $3 per machine hour
Cooking= 11,250/1,500= $7.5 per machine hour
Product testing= 112,500/600= $187.5 per batch
Department 2:
Machine calibration= 250,000/400= $625 per production run
Labeling= 12,000/120,000= $0.1 per cases of output
Defects= 6,000/120,000= $0.05 per cases of output
Support:
Recipe formulation= 90,000/45= $2,000 per focus group
Heat, lights, and water= 27,000/1,500= $18 per machine hour
Materials handling= 65,000/8= $8,125 per container types
<u>Now, we can allocate overhead to each product:</u>
<u></u>
<u>Extra Fine: </u>
Department 1:
Mixing= 3*500= $1,500
Cooking= 7.5*500= $3,750
Product testing= 187.5*200= $37,500
Department 2:
Machine calibration= 625*200= 125,000
Labeling= 0.1*20,000= 2,000
Defects= 0.05*20,000= 1,000
Support:
Recipe formulation= 2,000*30= 60,000
Heat, lights, and water= 18*500= 9,000
Materials handling= 8,125*5= 40,625
Total allocated overhead= $280,375
Unitary cost= 280,375/20,000= $14
<u>Family Style:</u>
<u></u>
Department 1:
Mixing= 3*1,000= $3,000
Cooking= 7.5*1,000= $7,500
Product testing= 187.5*400= $75,000
Department 2:
Machine calibration= 625*200= 125,000
Labeling= 0.1*100,000= 10,000
Defects= 0.05*20,000= 5,000
Support:
Recipe formulation= 2,000*15= 30,000
Heat, lights, and water= 18*1,000= 18,000
Materials handling= 8,125*3= 24,375
Total allocated overhead= $297,875
Unitary cost= 297,875/100,000= $2.98
<u>Finally, the total unitary cost:</u>
<u />
Extra Fine= 6 + 6 + 14= $26
Family Style= 5 + 5 + 2.98= $12.98
