Lex Corporation estimates that its production for the coming year will be 500,000 units, which is 80% of normal capacity, with the following unit costs: Direct Materials P 40 Direct labor 60 Direct labor is paid at the rate of P24 per hour. The machine should be run for 20 minutes to produce one unit. Total estimated overhead is expected to consist of P4,000,000 for variable and P4,000,000 for fixed overhead. What is the predetermined overhead rate based on material cost? A. 100% B. 200% C. 40% D. 300%

Lex Corporation estimates that its production for the coming year will be 500,000 units, which is 80% of normal capacity, with the following unit costs: Direct Materials P 40 Direct labor 60 Direct labor is paid at the rate of P24 per hour. The machine should be run for 20 minutes to produce one unit. Total estimated overhead is expected to consist of P4,000,000 for variable and P4,000,000 for fixed overhead. What is the predetermined overhead rate based on material cost? A. 100% B. 200% C. 40% D. 300%

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter2: Job Order Costing

Section: Chapter Questions

Problem 4CMA: Patterson Corporation expects to incur 70,000 of factory overhead and 60,000 of general and...

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