Determine the single plantwide factory overhead rate

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Question - 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

$20,824

Indirect labor

51,608

Factory electricity

5,885

Indirect materials

12,223

Selling expenses

28,973

Administrative expenses

16,297

Total costs

$135,810

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

4,500

0.15

Potato chips

2,700

0.12

Pretzels

5,100

0.10

Total

12,300


Required -

a. Determine the single plantwide factory overhead rate.

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.

Reference no: EM133137812

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