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.

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 $100,620

Explanation / 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.

Budgeted Volume
(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

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