ad and P900,000 for fixed overhead. a. What is the predetermined overhead rate base on units of production using the expected actual capacity activity level? b. What is the predetermined overhead rate base on material cost? C. What is the predetermined overhead rate base on direct labor cost?

ad and P900,000 for fixed overhead. a. What is the predetermined overhead rate base on units of production using the expected actual capacity activity level? b. What is the predetermined overhead rate base on material cost? C. What is the predetermined overhead rate base on direct labor cost?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

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TASK B. Read the problem and provide what is being required.
1. Golf Corporation estimates that its production for the coming year will be 25,000 units,
which is 90% of normal capacity, with the following units costs:
Materials
P50
Direct labor
90
Direct labor is paid at the rate of P25 per hour. The machine should be run 20 minutes to
produce one unit. Total estimated overhead is expected to consist of P900,000 for variable
overhead and P900,000 for fixed overhead.
a. What is the predetermined overhead rate base on units of production using the
expected actual capacity activity level?
b. What is the predetermined overhead rate base on material cost?
C. What is the predetermined overhead rate base on direct labor cost?
d. What is the predetermined overhead rate base on direct labor hours?
e. What is the predetermined overhead rate based on machine hours?
What is the predetermined overhead rate base on units of production using the
normal capacity level?
g. What is the predetermined overhead rate base on material cost using the normal
capacity level?
h. What is the overhead rate base on machine hours using the normal capacity
f.
activity level?

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