Single plantwide factory overhead rate Krispy Treats Snack Food Company manufact
ID: 2449222 • 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 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 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.
Factory depreciation $15,428 Indirect labor 38,236 Factory electricity 4,360 Indirect materials 9,056 Selling expenses 21,466 Administrative expenses 12,074 Total costs $100,620Explanation / Answer
Total factory overhead costs = $100,620 - $21,466 -$12,074 = $67,080
The selling and administrative expenses are not factory overhead
Single Plantwide Factory Overhead Rate = $67,080/1290 processing hours = $52
b.
(Cases) Processing Hours
Per Case Processing Hours Tortilla chips 2,400 0.15 360 Potato chips 3,900 0.10 390 Pretzels 4,500 0.12 540 Total 10,800 1290 hours