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:

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1	Factory depreciation	$31,360.00
2	Indirect labor	78,400.00
3	Factory electricity	7,840.00
4	Indirect materials	35,400.00
5	Selling expenses	25,000.00
6	Administrative expenses	18,000.00
7	Total costs	$196,000.00

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:

		Required:
		Budgeted Volume (Cases)	Processing Hours per Case
Tortilla chips		4,000	0.20
Potato chips		5,000	0.15
Pretzels		2,500	0.40
Total		11,500

A. Determine the single plantwide factory overhead rate. If required, round your answer to the nearest cent.

per processing hour

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Explanation

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 Overhead	Case Factory Overhead