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Single Plantwide Factory Overhead Rate Scrumptious Snacks Inc. manufactures three types of snack foods: tortilla chips, potato chips, and pretzels. The company has budgeted the
Single Plantwide Factory Overhead Rate Scrumptious Snacks Inc. 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 $6,948 Indirect labor 17,220 Factory electricity 1,964 Indirect materials 4,078 Selling expenses 9,667 Administrative expenses 5,438 Total costs $45,315 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 0.12 Potato chips 2,100 0.15 Pretzels 3,000 0.10 Total 6,600 If required, round all per-case answers to the nearest cent. a. Determine the single plantwide factory overhead rate. $ 0.37 X per processing hour b. Use the overhead rate in (a) to determine the amount of total and per-case overhead allocated to each of the three products under generally accepted accounting principles. Pretzels 3,000 0.10 Total 6,600 If required, round all per-case answers to the nearest cent. a. Determine the single plantwide factory overhead rate. 0.37 X per processing hour b. Use the overhead rate in (a) to determine the amount of total and per-case overhead allocated to each of the three products under generally accepted accounting principles. Total Factory Overhead Per-Case Factory Overhead Tortilla chips $ 10,260 x 0.12 x Potato chips 2,100 X Pretzels Total 45,315 X Feedback Check My Work a. 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. b. 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
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