7/26/2020 CengageNOWv2 | Online teaching and learning resource from Cengage Learning Single plantwide factory overhead rate Instructions Salty Sensations Snacks Company manufactures three types of snack foods: tortilla chips, potato chips, and pretzels. The company has budgeted the following costs for the upcoming period: 1 Factory depreciation 2 Indirect labor $25,888.00 3 Factory electricity 6,472.00 4 Indirect materials 25,020.00 5 Selling expenses 24,100.00 6 Administrative expenses 15,600.00 64,720.00 $161,800.00 Total costs 7 Factory overhead is allocated to the three products on the basis of processing hours. The products had the following production budget and processing hours per case: Budgeted Volume (Cases) Processing Hours per Case Tortilla chips 4,000 0.15 Potato chips 4,700 0.12 Pretzels 2,400 0.44 Total 11,100 Required: a. Determine the single plantwide factory overhead rate.* b. Use the factory overhead rate in (a) to determine the amount of total and per-case factory overhead allocated to each of the three products under generally accepted accounting principles. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.* * If required, round your answers to the nearest cent. Amount Descriptions Amount Descriptions Potato chips Pretzels Setup Quality control Tortilla chips Total Overhead Shaded cells have feedback. a. Determine the single plantwide factory overhead rate. If required, round your answer to the nearest cent. $ per processing hour Points: 0/1 Feedback Check My Work First calculate: Budgeted production volume for each product x Processing hours. Add together to obtain total processing hours. Recall that factory overhead does not include selling and administrative expenses. Divide the total of overhead costs by total processing hours to obtain the overhead rate. https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false 1/2 7/26/2020 CengageNOWv2 | Online teaching and learning resource from Cengage Learning b. Use the factory overhead rate in (a) to determine the amount of total and per-case factory overhead allocated to each of the three products under generally accepted accounting principles. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. If required, round your answer to the nearest cent. Total Factory 1 2 Tortilla chips 3 Potato chips 4 Pretzels 5 Total Overhead 24/49 PerScore: Case Factory Overhead Points: 5.39 / 11 Feedback Check My Work Calculate: Overhead Rate in Req. (a) x Processing hours for each product = Overhead for each. Add all overhead amounts to obtain the total. Divide individual overhead amounts by budgeted production volume for each product to obtain overhead per unit. https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false 2/2
