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:
Factory depreciation
$11,233
Indirect labor
27,839
Factory electricity
3,175
Indirect materials
6,593
Selling expenses
15,629
Administrative expenses
8,791
Total costs
$73,260
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
5,700
0.15
Potato chips
1,800
0.12
Pretzels
1,500
0.10
Total
9,000
If required, round all per-case answers to the nearest cent.
a. Determine the single plantwide factory overhead rate. $ 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.
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