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Single Plantwide Factory Overhead Rate Scrumptious Snacks Inc. manufactures three types of snack foods: tortilla chips,...

Single Plantwide Factory Overhead Rate Scrumptious Snacks Inc. manufactures three types of snack foods: tortilla chips, potata. Determine the single plantwide factory overhead rate. 69 X per processing hour b. Use the overhead rate in (a) to determin

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 $13,394 Indirect labor 33,195 Factory electricity 3,785 Indirect materials 7,862 Selling expenses 18,636 Administrative expenses 10,482 Total costs $87,354 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 5,400 0.15 Potato chips 2,400 0.10 Pretzels 0.12 1,800 9,600 Total If required, round all per-case answers to the nearest cent.
a. Determine the single plantwide factory overhead rate. 69 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 $ 810 х 10.35 x Potato chips 240 X 6.9 х Pretzels 2164 x 8.28 X Total 87,354 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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Answer #1
a) Computation of plantwide factory overhead rate
Factory depreciation $ 13,394.00
Indirect labor $ 33,195.00
Factory electricity $   3,785.00
Indirect materials $   7,862.00
Total factory OH $ 58,236.00
Total proc. Hours (workings) 1266
Factory OH rate $        46.00

Workings:

Proc. Hours Total
Cases per case Proc. Hours
Tortilla chips 5400 0.15 810
Potato chips 2400 0.1 240
Pretzels 1800 0.12 216
1266
b) Allocation of OH to products
Total Per case
Factory OH Workings Factory OH
Tortilla chips $ 37,260.00 (810 x $ 46) $        6.90 ($ 37260 / 5400)
Potato chips $ 11,040.00 (240 x $ 46) $        4.60 ($ 11040 / 2400)
Pretzels $   9,936.00 (216 x $ 46) $        5.52 ($ 9936 / 1800)
$ 58,236.00
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