Instructions Salty Sensations Snacks Company manufactures three types of snack f
ID: 2405035 • Letter: I
Question
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:
1
Factory depreciation
$31,023.00
2
Indirect labor
77,557.00
3
Factory electricity
7,756.00
4
Indirect materials
35,056.00
5
Selling expenses
23,100.00
6
Administrative expenses
19,400.00
7
Total costs
$193,892.00
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:
* If required, round your answers to the nearest cent.
a. Determine the single plantwide factory overhead rate. If required, round your answer to the nearest cent.
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. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. If required, round your answer to the nearest cent.
1
Total Factory Overhead
Per Case Factory Overhead
2
3
4
5
1
Factory depreciation
$31,023.00
2
Indirect labor
77,557.00
3
Factory electricity
7,756.00
4
Indirect materials
35,056.00
5
Selling expenses
23,100.00
6
Administrative expenses
19,400.00
7
Total costs
$193,892.00
Explanation / Answer
Budgeted volume (Cases) Processing Hours per Case Total Processing Hours Tortilla Chips 3,800 0.21 798 Potato Chips 4,600 0.13 598 Pretzels 2,800 0.45 1,260 Total 11,200 2,656 Total Factory Overhead ($ ) 193,892 Total Processing Hours ( Hours) 2,656 Overhead rate per hour ($ ) 73.00 Total Processing Hours Total Factory Overhead ($ ) Budgeted volume (Cases) Per Case Factory Overhead ($ ) Tortilla Chips 798 58,255.20 3,800 15.33 Potato Chips 598 43,654.90 4,600 9.49 Pretzels 1,260 91,981.90 2,800 32.85 Total 2,656 193,892.00 11,200