RALPH Inc. has three producing departments (R, A, and L) and two service departments (P and H). Data that summarize overhead activity for January are: P costs are distributed based on direct labor hours, while H costs are distributed based on the number of employees. The Pro-rata ratio is rounded-off in 2 decimal places. The answer is rounded-off at the nearest peso value. Required: Under the algebraic method, how much is the overhead cost allocated by Department P?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
RALPH Inc. has three producing departments (R, A, and L) and two service departments (P and H). Data that summarize
P costs are distributed based on direct labor hours, while H costs are distributed based on the number of employees.
The Pro-rata ratio is rounded-off in 2 decimal places. The answer is rounded-off at the nearest peso value.
Required:
Under the algebraic method, how much is the overhead cost allocated by Department P?
![Producing Departments
Servicing Departments
R
A
L.
H.
Total
Overhead Costs
182,600
195,700
178,500
48,700
65,000
670,500
Estimated:
Direct Labor Hours used
4,000
4,000
2,000
21,000
8,000
8,000
3,000
Machine Hours used
4,000
4,000
4,000
2,000
22,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fba23de35-3381-4f55-8c13-4e2ee415b049%2F2d486457-61b0-4c2f-961f-b8858d6b00f8%2Fbab4wwd_processed.png&w=3840&q=75)
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