In: Accounting
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$20,595
Indirect labor51,040
Factory electricity5,820
Indirect materials12,089
Selling expenses28,654
Administrative expenses16,118
Total costs$134,316
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 6,000 0.15
Potato chips 5,700 0.10
Pretzels 2,100 0.12
Total 13,800
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 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 OverheadPer-Case
Factory Overhead
Tortilla chips$$
Potato chips
Pretzels
Total $