Single Plantwide Factory Overhead Rate
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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:
|
Factory depreciation |
$11,233 |
||
|
Indirect labor |
27,839 |
||
|
Factory electricity |
3,175 |
||
|
Indirect materials |
6,593 |
||
|
Selling expenses |
15,629 |
||
|
Administrative expenses |
8,791 |
||
|
Total costs |
$73,260 |
||
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 |
|||||||
|
Tortilla chips |
5,700 |
0.15 |
||||||
|
Potato chips |
1,800 |
0.12 |
||||||
|
Pretzels |
1,500 |
0.10 |
||||||
|
Total |
9,000 |
|||||||
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 |
|
|
Tortilla chips |
$ |
$ |
|
Potato chips |
||
|
Pretzels |
||
|
Total |
$ |
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