Single plantwide factory overhead rate Krispy Treats Snack Food Company manufact
ID: 2374056 • Letter: S
Question
Single plantwide factory overhead rate
Krispy Treats 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
$19,976
Indirect labor
49,505
Factory electricity
5,645
Indirect materials
11,724
Selling expenses
27,792
Administrative expenses
15,633
Total costs
$130,275
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
2,700
0.15
Potato chips
5,400
0.10
Pretzels
6,600
0.12
Total
14,700
If required, round all per-case answers to nearest cent.
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.
Total
Factory Overhead
Per-Case
Factory Overhead
Tortilla chips
$
$
Potato chips
$
$
Pretzels
$
$
Total
$
Factory depreciation
$19,976
Indirect labor
49,505
Factory electricity
5,645
Indirect materials
11,724
Selling expenses
27,792
Administrative expenses
15,633
Total costs
$130,275
Explanation / Answer
a. Determine the single plantwide factory overhead rate.
single plantwide factory overhead rate = 86850/1737 = $50 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.
Total
Factory Overhead
Per-Case
Factory Overhead
Tortilla chips
$20250
$ 7.50
Potato chips
$ 27000
$ 5.00
Pretzels
$ 39600
$ 6.00
Total
$ 86850
Total
Factory Overhead
Per-Case
Factory Overhead
Tortilla chips
$20250
$ 7.50
Potato chips
$ 27000
$ 5.00
Pretzels
$ 39600
$ 6.00
Total
$ 86850