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Single Plantwide Factory Overhead Rate 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: $21,908 Factory depreciation Indirect labor 54,292 Factory electricity 6,191 Indirect materials 12,859 30,480 Selling expenses Administrative expenses 17,145 Total costs $142,875 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 Processing Hours (Cases) Per Case Tortilla chips 6,900 0.10 Potato chips 6,000 0.12 Pretzels 3,300 0.15 Total 16,200 If required, round all per-case answers to the nearest cent. a. Determine the single plantwide factory overhead rate. per processing hour 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. Total Per-Case Factory Overhead Factory Overhead Tortilla chips Potato chips Pretzels Total Product Costs and Product Profitability Reports, using a Single Plantwide Factory Overhead Rate Elliott Engines Inc. produces three products-pistons, valves, and cams-for the heavy equipment industry. Elliott Engines has a very simple production process and product line and uses a single plantvide factory overhead rate to allocate overhead to the three products. The factory overhead rate is based on direct labor hours. Information about the three products for 20Y2 is as follows: Budgeted Volume Direct Labor Price Per Direct Materials (Units) Hours Per Unit Unit Per Unit Pistons 11,000 0.20 $44 S21 Valves 23,000 0.15 11 4 Cams 2,000 0.30 58 25 The estimated direct labor rate is $25 per direct labor hour. Beginning and ending inventories are negligible and are, thus, assumed to be zero. The budgeted factory overhead for Elliott Engines is $175,000. If required, round all per unit answers to the nearest cent. a. Determine the plantwide factory overhead rate. S per dih b. Determine the factory overhead and direct labor cost per unit for each product. Direct Labor Factory Overhead Direct Labor Hours Per Unit Cost Per Unit Cost Per Unit Pistons dih dih Valves s S Cams dlh S $ Feedback c. Use the information above to construct a budgeted gross profit report by product line for the year ended December 31, 2012. Include the gross profit as a percent of sales in the last line of your report, rounded to one decimal place. Enter all amounts as positive numbers, except for a negative gross profit gross profit percentage of sales. Elliot Engines Inc. Product Line Budgeted Gross Profit Reports For the Year Ended December 31, 2012 Pistons Valves Cams Revenues S Product Costs Direct materials s s Direct labor Factory overhead Total Product Costs Gross profit % % Gross profit percentage of sales % FeedbackStep by Step Solution
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