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Chapter 4-Test Material 4 1

1. The document shows the calculation of predetermined overhead rates using estimated machine hours and budgeted overhead costs. Applied overhead is allocated to Work in Process, Cost of Goods Sold, and Finished Goods. 2. Cost of Goods Sold, Work in Process, and Finished Goods figures are used to calculate actual overhead and compare to applied overhead. 3. Budgeted overhead costs are provided for different departments to calculate predetermined overhead rates per direct labor hour for each department.

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Marcus Monocay
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118 views

Chapter 4-Test Material 4 1

1. The document shows the calculation of predetermined overhead rates using estimated machine hours and budgeted overhead costs. Applied overhead is allocated to Work in Process, Cost of Goods Sold, and Finished Goods. 2. Cost of Goods Sold, Work in Process, and Finished Goods figures are used to calculate actual overhead and compare to applied overhead. 3. Budgeted overhead costs are provided for different departments to calculate predetermined overhead rates per direct labor hour for each department.

Uploaded by

Marcus Monocay
Copyright
© © All Rights Reserved
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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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

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