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.

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).

Transcribed Image Text:

Per Unit (case) Extra Fine........ Family Style.. Selling Price $64 53 Direct Materials $18 16 Direct Labor $30 25