Exercise 5: Computation for Overhead Variance ind Journal Entries Golden Manufacturers, Inc. applies factory overhead at P8 per direct labor hour. Actual factory overhead and actual labor hours for 19F were P470,500 and 58,000 hours, respectively. Normal capacity is 60,000 hours.

Exercise 5: Computation for Overhead Variance ind Journal Entries Golden Manufacturers, Inc. applies factory overhead at P8 per direct labor hour. Actual factory overhead and actual labor hours for 19F were P470,500 and 58,000 hours, respectively. Normal capacity is 60,000 hours.

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

Instruction:

a. Compute for the factory overhead variance

b. Make the journal entries that relate to the factory overhead 19F.

Exercise 5: Computation for Overhead Variance and Journal Entries
Golden Manufacturers, Inc. applies factory overhead at P8 per direct labor hour.
Actual factory overhead and actual labor hours for 19F were P470,500 and 58,000 hours,
respectively. Normal capacity is 60,000 hours.

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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