Reference no: EM132658812
Question - Single Plant-wide 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 $22,952
Indirect labor 56,881
Factory electricity 6,486
Indirect materials 13,473
Selling expenses 31,933
Administrative expenses 17,963
Total costs $149,688
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 4,200 0.15
Potato chips 2,700 0.10
Pretzels 5,100 0.12
Total 12,000
If required, round all per-case answers to the nearest cent.
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. How do you calculate the total factory overhead for each product?