Solution-Determine the single plantwide factory overhead

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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Determine the single plantwide factory overhead rate

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