Chapter 4-Test Material 4

Applied overhead:
Work in Process ₱ 460,000.00
Cost of Goods Sold 1,440,000.00
Finished Goods 500,000.00
Overhead applied ₱ 2,400,000.00
Divide: estimated machine hours 50,000.00
Predetermined overhead rate ₱ 48.00

Sales ((500,000*0.20)+500,000) ₱ 600,000.00

Less: gross margin (190,000.00)
Cost of Goods Sold ₱ 410,000.00
Add: Finished Goods, end. 60,000.00
Less: Finished Goods, beg. (81,000.00)
Cost of Goods Manufactured ₱ 389,000.00
Add: Work in Process, end. 85,000.00
Less: Work in Process, beg. (78,000.00)
Manufacturing costs ₱ 396,000.00
Less: Prime costs (342,000.00)
Overhead Applied ₱ 54,000.00
Divide: actual labor hours 45,000.00
Overhead rate ₱ 1.20

Budgeted overhead costs Finishing Cost

Producing ₱ 1,510,439.00
Finishing 1,315,561.00
Total budgeted overhead costs ₱ 2,826,000.00
Divide: estimated direct labor hours 50,000.00
Overhead rate per DLH ₱ 56.52

Producing department ₱ 1,000,000.00

Maintenance [(5/8)*300,000] 187,500.00
Personnel [(50/75)*400,125] 266,750.00
Finance [(30/70)*150,875] 64,661.00
Overhead cost for assembly ₱ 1,518,911.00
Divide: direct labor hours, Assembly 35,000.00
Overhead rate for Assembly Department ₱ 43.40

Sewing Treating
Budgeted overhead ₱ 76,000.00 ₱ 182,000.00
Divide: stimated Machine hours 1250
Divide: estimated direct labor hours 5200
Overhead rate ?60.80 ₱ 35.00
Multiply: applied machine hours 80
Multiply: applied labor hours 380
Overhead applied ₱ 4,864.00 ₱ 13,300.00

Total ₱ 18,164.00

Total Budgeted overhead ₱ 258,000.00

Divide: estimated total labor hours 9200
Overhead rate ₱ 28.04
Multiply: labor hours incurred 480
Applied overhead ₱ 13,459.00

Budgeted overhead ₱ 266,400.00

Divide: estimated machine hours 18500
Overhead rate ₱ 14.40
Multiply: actual machine hours 19,050.00
Applied overhead ₱ 274,320.00
Actual overhead 287,920.00
Overhead variance (underapplied) ₱ 13,600.00
Multiply: Cost of Sales 560,000.00
Divide: (190,000 + 250,000 + 560,000) 1,000,000.00
Debit to Cost of Sales ₱ 7,616.00

Car Wheels Truck Wheels

Units to be manufactured 80000 20000
Expected labor hours per unit 2.5 4
Total expected direct labor hours ₱ 200,000.00 ₱ 80,000.00
Total annual budgeted overhead costs
Manufacturing overhead per DLH
Car Wheels Truck Wheels
Direct labor incurred
190,000*38.50 ₱ 7,315,000.00
82,500*38.50 ₱ 3,176,250.00
Overhead applied
26.25*190,000 4,987,500.00
26.25*82,500 2,165,625.00
Conversion costs ₱ 12,302,500.00 ₱ 5,341,875.00
Divide: actual units produced 75,000.00 18,000.00
Conversion costs per unit ₱ 164.00 ₱ 297.00

Factory overhead ₱ 259,600.00

Divide: direct labor costs 324,500.00
Overhead rate ₱ 0.80

Direct materials used ₱ 341,000.00

Direct labor costs 324,500.00
Factory overhead 259,600.00
Manufacturing costs ₱ 925,100.00
Less: Cost of Goods Manufactured (825,400.00)
Work in Process, end. ₱ 99,700.00
Less: direct materials in process (70,000.00)
Converion costs still in process 29,700.00
Less: labor cost in process (29700/1.80) (16,500.00)
Overhead still in process ₱ 13,200.00

Overhead put into process ₱ 259,600.00

Less: overhead still in process (13,200.00)
Overhead component of Goods Manufactured ₱ 246,400.00

10

Budgeted overhead ₱ 180,000.00

Budgeted fixed overhead:
Factory rent ₱ 215,000.00
Factory equipment 38,000.00 253,000.00
Estimated overhead ₱ 433,000.00
Divide: estimated machine hours 80000
Overhead rate ₱ 5.41
Multiply: actual machine hours 70000
Applied overhead ₱ 378,875.00
Actual overhead 387,875.00
Underapplied overhead ₱ 9,000.00
Total
100000

₱ 280,000.00
7,350,000.00
26.25