Question

In: Accounting

Salty Sensations Snacks Company manufactures three types of snack foods: tortilla chips, potato chips, and pretzels....


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

$30,986.00

2

Indirect labor

77,464.00

3

Factory electricity

7,746.00

4

Indirect materials

33,864.00

5

Selling expenses

25,300.00

6

Administrative expenses

18,300.00

7

Total costs

$193,660.00

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:

Required:

Budgeted Volume (Cases)

Processing Hours per Case

Tortilla chips

4,000

0.23

Potato chips

4,500

0.12

Pretzels

2,500

0.40

Total

11,000

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

Solutions

Expert Solution

a. Single plantwide factory overhead rate=Budgeted factory overhead/Budgeted processing hours
Budgeted factory overhead:
Factory depreciation 30986
Indirect labor 77464
Factory electricity 7746
Indirect materials 33864
Total 150060
Budgeted processing hours=Budgeted cases*Processing hours per case
Budgeted
Volume
( Cases)
Processing
Hours per
Case
Budgeted
Processing
Hours
4000 0.23 920
4500 0.12 540
2500 0.4 1000
2460
Single plantwide factory overhead rate=150060/2460=$ 61 per hour
b. Total Factory Overhead=Single plantwide factory overhead rate*Budgeted processing hours
Tortilla chips=61*920=56120
Potato chips=61*540=32940
Pretzels=61*1000=61000
Per case factory overhead=Total factory overhead/Budgeted volume
Tortilla chips=56120/4000=$ 14.03 per case
Potato chips=32940/4500=$ 7.32 per case
Pretzels=61000/2500=$ 24.40 per case

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