Question

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:

1	Factory depreciation	$31,023.00
2	Indirect labor	77,557.00
3	Factory electricity	7,756.00
4	Indirect materials	35,056.00
5	Selling expenses	23,100.00
6	Administrative expenses	19,400.00
7	Total costs	$193,892.00

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:

	Budgeted Volume (Cases)	Processing Hours per Case
Tortilla chips	3,800	0.21
Potato chips	4,600	0.13
Pretzels	2,800	0.45
Total	11,200

	Required:
a.	Determine the single plantwide factory overhead rate.*
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 answers to the nearest cent. a. Determine the single plantwide factory overhead rate. If required, round your answer to the nearest cent. 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. 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. 1 Total Factory Overhead Per Case Factory Overhead 2 3 4 5

Answer 1

	Budgeted volume (Cases)	Processing Hours per Case	Total Processing Hours
Tortilla Chips	3,800	0.21	798
Potato Chips	4,600	0.13	598
Pretzels	2,800	0.45	1,260
Total	11,200		2,656
Total Factory Overhead ($ )	193,892
Total Processing Hours ( Hours)	2,656
Overhead rate per hour ($ )	73.00
	Total Processing Hours	Total Factory Overhead ($ )	Budgeted volume (Cases)	Per Case Factory Overhead ($ )
Tortilla Chips	798	58,255.20	3,800	15.33
Potato Chips	598	43,654.90	4,600	9.49
Pretzels	1,260	91,981.90	2,800	32.85
Total	2,656	193,892.00	11,200