Savory Snack Food Company manufactures three types of snack foods: tortilla chips, potato chips, and pretzels. The

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Savory 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 depreciation ..........$ 21,120

Indirect labor ............ 52,800

Factory electricity .......... 5,280

Indirect materials .......... 18,800

Selling expenses ........... 22,000

Administrative expenses ........ 12,000

Total costs .............. $132,000

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:


Savory Snack Food Company manufactures three types of snack foods:


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 accountingprinciples.

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Financial and Managerial Accounting

ISBN: 978-1285078571

12th edition

Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac

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