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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 $8,636
Indirect labor 21,402
Factory electricity 2,441
Indirect materials 5,069
Selling expenses 12,015
Administrative expenses 6,759
Total costs $56,322
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
1,200
0.15
Potato chips
0.12
Pretzels
5,700
0.10
Total
8,100
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.
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