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  • Chapter 6 Seatwork

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    Ella Blanca Buya
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    The document discusses three companies' predetermined overhead rates using different allocation bases. Company X uses direct labor hours at a rate of P7.2 per hour. Company Y uses machine hours at a rate of P3 per hour. Company Z uses materials cost at 160% of materials cost. It also provides an example for Company X where the actual overhead incurred was P420,000 and overhead applied to work in process was P417,600 based on 58,000 actual direct labor hours, resulting in P2,400 of underapplied overhead cost.

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    The document discusses three companies' predetermined overhead rates using different allocation bases. Company X uses direct labor hours at a rate of P7.2 per hour. Company Y uses machine hours at a rate of P3 per hour. Company Z uses materials cost at 160% of materials cost. It also provides an example for Company X where the actual overhead incurred was P420,000 and overhead applied to work in process was P417,600 based on 58,000 actual direct labor hours, resulting in P2,400 of underapplied overhead cost.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    13 views2 pages

    Chapter 6 Seatwork

    Uploaded by

    Ella Blanca Buya
    The document discusses three companies' predetermined overhead rates using different allocation bases. Company X uses direct labor hours at a rate of P7.2 per hour. Company Y uses machine hours at a rate of P3 per hour. Company Z uses materials cost at 160% of materials cost. It also provides an example for Company X where the actual overhead incurred was P420,000 and overhead applied to work in process was P417,600 based on 58,000 actual direct labor hours, resulting in P2,400 of underapplied overhead cost.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    BUYA, ELLA BLANCA R.

    1BSA

    Exercise 3 (Applying Overhead with Various Bases)

    Requirement 1

    Predetermined overhead rates:

    Company X:

    Predetermined overhead rate = Estimated total manufacturing overhead cost


    Estimated total amount of the allocation base

    = P432,000
    60,000 Direct Labor hours

    = P7.2 per Direct Labor Hours

    Company Y:

    Predetermined overhead rate = Estimated total manufacturing overhead cost


    Estimated total amount of the allocation base

    = P270,000
    90,000 Machine-hours

    = P3 per Machine-hours

    Company Z:

    Predetermined overhead rate = Estimated total manufacturing overhead cost


    Estimated total amount of the allocation base

    = P384,000
    P240,000 materials cost

    = 160% of materials cost

    Requirement 2
    Actual overhead costs incurre P420,000
    Overhead cost applied to Work in Process:
    58,000* actual hours × P7.20 per hour 417,600
    Underapplied overhead cost P 2,400

    * 7,000 hours + 30,000 hours + 21,000 hours = 58,000 hours

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