QUESTIONS:

Factory Overheads Activity Costs Cost Driver

Machine Setups ₱500,000.00 Number of Setups
Materials Handling ₱375,000.00 Weight of Materials
Other overhead costs ₱100,000.00 Labour Hours
TOTAL OVERHEADS ₱975,000.00 -

Product V Product P
Direct Labour ₱125,000.00 ₱175,000.00
Direct Materials ₱570,000.00 ₱225,000.00

Cost Driver Product V Product P

Number of Setups 90 setups 35 setups
Weight of Materials 45,000 pounds 30,000 pounds
Labour Hours 5,000 hours 5,000 hours

ANSWERS:

Product V Product P
Machine Setups
Product V ₱360,000.00
Product P ₱140,000.00

Materials Handling
Product V ₱225,000.00
Product P ₱150,000.00

Other overhead costs

Product V ₱50,000.00
Product P ₱50,000.00
FACTORY OVERHEADS per Product ₱635,000.00 ₱340,000.00

Product V Product P
Direct Labour ₱125,000.00 ₱175,000.00
Direct Materials ₱570,000.00 ₱225,000.00
Factory Overheads ₱635,000.00 ₱340,000.00
MANUFACTURING COSTS per Produc ₱1,330,000.00 ₱740,000.00
Activity Level
125 setups
75,000 pounds
10,000 hours
-

Total
₱300,000.00
₱795,000.00

Total
125 setups
75,000 pounds
10,000 hours

Total Product V
Factory Overheads Activity Level
₱360,000.00 Machine Setups 90
₱140,000.00 Materials Handling 45,000
Other overhead costs 5,000

₱225,000.00 Product P
₱150,000.00 Factory Overheads Activity Level
Machine Setups 35
Materials Handling 30,000
₱50,000.00 Other overhead costs 5,000
₱50,000.00
₱975,000.00

Total
₱300,000.00
₱795,000.00
₱975,000.00
₱2,070,000.00
Product V Factory Overheads Activity Costs
Cost Rates Overheads Allocation Machine Setups ₱500,000.00
₱4,000.00 ₱360,000.00 Materials Handling ₱375,000.00
₱5.00 ₱225,000.00 Other overhead costs ₱100,000.00
₱10.00 ₱50,000.00 TOTAL OVERHEADS ₱975,000.00

Product P
Cost Rates Overheads Allocation
₱4,000.00 ₱140,000.00
₱5.00 ₱150,000.00
₱10.00 ₱50,000.00
Activity Level Cost Rates
125 setups ₱4,000.00
75,000 pounds ₱5.00
10,000 hours ₱10.00
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