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: $ 33,120 82,800 8,280 Factory depreciation Indirect labor Factory electricity Indirect materials Selling expenses Administrative expenses 31,800 22,000 29,000 Total costs $207,000 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 Processing Hours Volume (Cases) Per Case Tortilla chips 3,000 0.25 Potato chips 6,000 0.10 Pretzels 3,500 0.30 Total 12,500 If required, round all per unit answers to the nearest cent. a. Determine the single plantwide factory overhead rate. per processing hour 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. Total Factory Overhead Per Case Factory Overhead Tortilla chips Potato chips Pretzels Total

Answer 1

Please find below table useful to compute desired results: -

A 1 Particulars Given 2 Budgeted Costs 3 Factory Depreciation 33120 4 Indirect Labor 82800 5 Factory Electricity 8280 6 Indirect Material 31800 7 Production Budget and Processing Hours 8 Tortilla Chips 3000 9 Processing Hours Per case 10.25 10 Potato Chips 6000 11 Processing Hours Per case 0.1 12 Pretzels 13500 13 Processing Hours Per case 14 Total Factory overhead =SUM(B3-B6) 15 Total Processing Hours =B8*B9+B10*B11+B12*B13 16 a. 17 Single Plantwide Factory Overhead Rate =B14/B15 18 b. 19 Product Name Total Factory Overhead 20 Tortilla Chips =B14*B8*B9/B15 21 Potato Chips =B14*B10*B11/B15 22 Pretzels =B14*B12*B13/B15 23 Total =SUM(B20:B22) 0.3 Per processing Hour Per cash factory overhead =B20/BS =B21/B10 =B22/B12

End results would be as follows: -

A B Particulars Given 2 Budgeted Costs 3 Factory Depreciation 33.120 4. Indirect Labor 82.800 5 Factory Electricity 8,280 6 Indirect Material 31.800 7 Production Budget and Processing Hours 8 Tortilla Chips 3,000 9 Processing Hours Per case 0.25 10 Potato Chips 6,000 11 Processing Hours Per case 0.10 12 Pretzels 3.500 13 Processing Hours Per case 0.30 14 Total Factory overhead 156,000 15 Total Processing Hours 16 a. 17 Single Plantwide Factory Overhead Rate 65 Per processing Hour 18 b. 19 Product Name | Total Factory Overhead Per cash factory overhead 20 Tortilla Chips 48,750 16.25 21 Potato Chips 39,000 6.50 22 Pretzels 68,250 19.50 23 Total 156,000 2,400