Single plantwide factory overhead rate

Reference no: EM131101754

Salty Sensations Snacks 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	$ 31,360
Indirect labor	78,400
Factory electricity	7,840
Indirect materials	35,400
Selling expenses	25,000
Administrative expenses	18,000
Total costs	$196,000

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	4,000	0.20
Potato chips	5,000	0.15
Pretzels	2,500	0.40

Total 11,500

a. Determine the single plantwide factory overhead rate.

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: EM131101754

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