Problem 18: Predetermined Factory Overhead believes that the company would be better if it will use two factory overhead single factory overhead rate that is based on machine hours. Its manager Davao Corp. uses job order costing system to produce its products. It uses a rates, one based on material costs and the other one is based machine hours. The following data are for year 2020: Materials related Factory overhead Machine related Factory overhead Total Budgeted Factory overhead Costs of materials used on jobs Total Machine hours Data related to three jobs worked on in December follow: Material Costs Direct Labor Costs Machine Hours used Job # 1 168,000 128,000 68,000 Budgeted FOH 3,840,000 10,400,000 14,240,000 Job # 2 656,000 104,000 36,000 Job Order Costing 12,800,000 1,600,000 Job # 3 312,000 144,000 23,200 Actual factory overhead related to materials was P318,400 and actual factory overhead related to machine hours was P846,400. Required: 1. Determine the predetermine factory overhead rate based on machine hours, assuming Davao Corp. uses only machine hours to compute the factory overhead applied. 2. Determine the factory overhead applied and total costs of each job. 3. Using two factory overhead rates as suggested by the manager, recomputed requirements 1 and 2.

Q: mpute activity) for the Making A WHings and J86 tes (Le., cost per Support activity cost pools by…

A: Activity Based Costing System This one of the costing techniques which are used to  calculate the…

Q: Kingsport Containers Company makes a single product with wide seasonal variations in demand. The…

A: Since you have posted a question with multiple sub parts, we will provide the solution only to the…

Q: Arensky Company uses normal costing to account for overhead in its job costing system. There are 2…

A: As per the honor code, we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit…

Q: Activities and Activity Measures Estimated Overhead Cost Supporting direct labour (DLHs) $552,000…

A: Traditional costing system is the system which is used to allocate the overhead on the basis of…

Q: The cost accountant for M. Company wants to determine the cost of factory overhead. Based on…

A: Note: Since the information of three divers i.e. no. of moves, machine hours, and purchase orders is…

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance. 

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.