Question

Single Plantwide Factory Overhead Rate Scrumptious Snacks Inc. 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 $9,472 Indirect labor 23,475 Factory electricity 2,677 Indirect materials 5,560 Selling expenses 13,179 Administrative expenses 7,413 Total costs $61,776 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 Processing Hours Volume (Cases) Per Case Tortilla chips 3,000 0.25 Potato chips 6,000 0.10 Pretzels 3,500 0.30 Total 12,500 If required, round all per unit answers to the nearest cent. Determine the single plantwide factory overhead rate. $ 86.25 X per processing hour.

Answer 1

The single plantwide overhead rate= $4.94

Step-by-step explanation:

The single factory wide overhead absorption rate is that which is used to charge overhead to different product units. The amount to be charged to units would depend on the number of processing hours required

The single plantwide overhead rate = Budgeted overhead/Budgeted processing hours

= 61,776/12,500=$4.94 per hour

The single plantwide overhead rate= $4.94