Instructions Salty Sensations Snacks Company manufactures three types of snack f
ID: 2579738 • 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 2 Indirect labor 3 Factory electricity 4 Indirect materials 5 Selling expenses 6 Administrative expenses 7 Total costs $31,875.00 79,688.00 7,969.00 35,788.00 24,800.00 19,100.00 S199,220.00 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:Explanation / Answer
Ans. A Single Planwide factory overhead Rate = 55 per processing hour *Calculation: Total Factory overhead / Total Processing Hours 155320 / 2824 55 Total factory overhead = (31875 + 79688 + 7969 + 35788) = 155320 Total Processing Hours = (4100 * 0.24) + (4800 * 0.20) + (2200 * 0.40) 984 + 960 + 880 2824 Ans. B Total Factory Per Case Factory Overhead Overhead Tortilla chips 54120 13.2 Potato chips 52800 11 Pretzels 48400 22 155320 *Total Factory Overhead: Tortilla chips 984 * 55 54120 Potato chips 960 * 55 52800 Pretzels 880 * 55 48400 *Per Case Factory Overhead: Tortilla chips 54120 / 4100 13.2 Potato chips 52800 / 4800 11 Pretzels 48400 / 2200 22