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.