Determine the single plantwide factory overhead rate

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Question - Single plantwide factory overhead rate

Texas Pete Snack Food 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

$21,869

Indirect labor

54,197

Factory electricity

6,180

Indirect materials

12,836

Selling expenses

30,426

Administrative expenses

17,115

Total costs

$142,623

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 Processing
Volume (Cases)

Production Hours
per Case

Tortilla chips

6,900

0.10

Potato chips

3,600

0.12

Pretzels

6,300

0.15


Total

16,800






If required, round all per case answers to 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.

Reference no: EM131818989

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