Question
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
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:
Factory depreciation | $13,645 | ||
Indirect labor | 33,817 | ||
Factory electricity | 3,856 | ||
Indirect materials | 8,010 | ||
Selling expenses | 18,985 | ||
Administrative expenses | 10,679 | ||
Total costs | $88,992 |
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 | 1,500 | 0.15 | ||||||
Potato chips | 3,600 | 0.12 | ||||||
Pretzels | 2,700 | 0.10 | ||||||
Total | 7,800 |
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 Factory Overhead | Per-Case Factory Overhead | |
Tortilla chips | $ | $ |
Potato chips | ||
Pretzels | ||
Total | $ |
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