Single Plantwide Factory Overhead Rate 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 $22,952 Indirect labor 56,881 Factory electricity 6,486 Indirect materials 13,473 Selling expenses 31,933 Administrative expenses 17,963 Total costs $149,688 Factory overhead is allocated to the three products on the basis of processing hours. The products had the following production budget and processing hours per case: Budgeted Volume(Cases) Processing HoursPer Case Tortilla chips 2,100 0.12 Potato chips 6,000 0.15 Pretzels 3,600 0.10 Total 11,700 If required, round all per-case answers to the nearest cent. a. Determine the single plantwide factory overhead rate.$ 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. TotalFactory Overhead Per-CaseFactory Overhead Tortilla chips $ $ Potato chips Pretzels Total $
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Single Plantwide Factory Overhead Rate
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 |
$22,952 | ||
| Indirect labor | 56,881 | ||
| Factory electricity | 6,486 | ||
| Indirect materials | 13,473 | ||
| Selling expenses | 31,933 | ||
| Administrative expenses | 17,963 | ||
| Total costs | $149,688 |
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 | 2,100 | 0.12 | ||||||
| Potato chips | 6,000 | 0.15 | ||||||
| Pretzels | 3,600 | 0.10 | ||||||
| Total 11,700 |
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.
| Total Factory Overhead |
Per-Case Factory Overhead |
|
| Tortilla chips | $ | $ |
| Potato chips | ||
| Pretzels | ||
| Total | $ |
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