Single plantwide factory overhead rate Instructions Amount Descriptions Overheac
ID: 2335944 • Letter: S
Question
Single plantwide factory overhead rate Instructions Amount Descriptions Overheac Instructions 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 1Factory depreciation 2Indirect labor 3 Factory electricity 4 Indirect materials 5 Selling expenses $30,986.00 77,464.00 7,746.00 33,864.00 25,300.00 18,30000 $193,660.00 Aministrative expenses 7Total costs 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 Tortilla chips Potato chips Pretzels Tota Budgeted Volume (Cases) 4,000 4,500 2,500 11,000 Processing Hours per Case 0.23 0.12 0.40 Required:Explanation / Answer
Single plant wide overhead rate :
Budgeted processing hour = (4000*.23+4500*.12+2500*.40)= 2460 Hour
Budgeted overhead = 30986+77464+7746+33864 = 150060
Single overhead rate = 150060/2460 = 61 per processing hour
b) Allocation :
Total factory overhead Per case factory overhead Tortilla chips 4000*.23*61 = 56120 56120/4000 = 14.03 Patato chips 4500*.12*61 = 32940 32940/4500 = 7.32 Pretzets 2500*.40*61 = 61000 61000/2500 = 24.40 Total 150060