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 $13,645
Indirect labor 33,817
Factory electricity 3,856
Indirect materials 8,010
Selling expenses 18,985
Administrative expenses 10,679
Total costs $88,992

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 1,500 0.15
Potato chips 3,600 0.12
Pretzels 2,700 0.10
Total 7,800

Required:
a. Determine the single plant-wide 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.

a. $64 per hour

b. Tortilla chips = $9.60, Potato chips = $7.68 , Pretzels = $6.40

Explanation:

Plant-wide factory overhead rate = Budgeted Overhead / Budgeted Activity

Calculation of Budgeted Overheads :

Hint : Consider only Indirect Manufacturing Costs

Factory depreciation    $13,645

Indirect labor                 $33,817

Factory electricity          $3,856

Indirect materials            $8,010

Total                             $59,328

Calculation of Budgeted Hours :

Tortilla chips (1,500 × 0.15)  = 225

Potato chips (3,600 × 0.12)  = 432

Pretzels (2,700 × 0.10 )        = 270

Total                                     = 927

Plant-wide factory overhead rate =  $59,328 / 927

                                                       =  $64 per hour

Factory overhead allocated to each of the three products :

Tortilla chips  (0.15  × $64) = $9.60

Potato chips  0.12  × $64) = $7.68

Pretzels  (0.10 × $64) = $6.40

due to the changes the federal reserve is making the unused reserves will impact the economy by them facing inflation. inflation is definfed as the increase in pricing of a good or service but the decline of the value of money used for purchasing those items. when the economy has a high inflation rate, they are subject to money loss and hurt on the economy.

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.