Single plantwide factory overhead rate Krispy Treats Snack Food Company manufact

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.

Total factory overhead per- case factory overhead

Tortilla chips $ $

Potato Chips $ $

Pretzels $ $

Total $ $

Factory depreciation $15,967 Indirect labor 39,569 Factory electricity 4,512 Indirect materials 9,372 Selling expenses 22,214 Administrative expenses 12,496 Total costs $104,130

Explanation / Answer

Hi,

Please find the answer as follows;

Part A:

Single plantwide factory overhead rate= Factory Overhead/Processing Hours = 69420/1335 = 52 per processing hour

Factory Overhead = =104130-22214-12496 = 69420

Processing Hours

Part B:

Thanks.

Budgeted Volume Processing Hours Per Case Processing Hours Tortilla chips 6,600 0.1 660 Potato chips 1,500 0.12 180 Pretzels 3,300 0.15 495


1335

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