B. Use the factory overhead rate in (A) to determine the amount of total and per
ID: 2568833 • Letter: B
Question
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. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. If required, round your answer to the nearest cent.
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:
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1
Factory depreciation
$35,101.00
2
Indirect labor
87,752.00
3
Factory electricity
8,775.00
4
Indirect materials
47,552.00
5
Selling expenses
25,200.00
6
Administrative expenses
15,000.00
7
Total costs
$219,380.00
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:
TOTAL 11800
Answers...Need help where ? are.
Pretzels 71,982 ?
potato chips 64790 ?
tortilla chips 42408 11.78
1
Factory depreciation
$35,101.00
2
Indirect labor
87,752.00
3
Factory electricity
8,775.00
4
Indirect materials
47,552.00
5
Selling expenses
25,200.00
6
Administrative expenses
15,000.00
7
Total costs
$219,380.00
Explanation / Answer
Total Factory overheads: factory depreciation 35101 Indirtect labour 87752 factory electricity 8775 Indirect Material 47552 Total Factory overheads: 179180 Total Processing time in hours Product Volume Processing time Total Processing hours Tortilla chips 3600 0.19 684 Potato Chips 5500 0.19 1045 Pretzels 2700 0.43 1161 2890 hrs Factory overhead rate per hour = Total factory Overheads/ Total Processing hours ( 179180 /2890) = $ 62 per processing hour 62 Factory Cost allocated and cost per unit Product Volume Processing time Overhead rate per hour Total factory Cost Allocated Cost per unit (Total cost/volume) Tortilla chips 3600 684 62 42408 11.78 Potato Chips 5500 1045 62 64790 11.78 Pretzels 2700 1161 62 71982 26.66
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