TIONAL pools and drivers has been developed: 1. Tower Company incurs about P860,000 in manufacturing overhead lines based on their relative shares of direct labor hours (DLH). The driven by other activities. The following information regarding cost concerned that using DLH is inappropriate because some costs are ost costs each month which had been allocated to individual product company works about 100,000 DLH per month. The company is st Amount in Amount of Cost Driver Pool Activity Direct labor hours Number of batches Engineering/ design changes P520,000 280,000 60,000 100,000 500 120 Total overhead costs P860,000 The following data regarding two product lines of the company are presented: Product AB Product CD 200 1,600 4. Direct labor hours Number of batches Engineering/design changes 12 24 Product AB are produced in large batches, while Product CD are as specialty line that only a few customers buy. What is the overhead to be allocated to each product line using DLH as the only cost driver? Product AB & P13,760 b. P13,760 c P14,000 d. P14,760 Product CD P1,270 P1,720 P7,120 P2,170
TIONAL pools and drivers has been developed: 1. Tower Company incurs about P860,000 in manufacturing overhead lines based on their relative shares of direct labor hours (DLH). The driven by other activities. The following information regarding cost concerned that using DLH is inappropriate because some costs are ost costs each month which had been allocated to individual product company works about 100,000 DLH per month. The company is st Amount in Amount of Cost Driver Pool Activity Direct labor hours Number of batches Engineering/ design changes P520,000 280,000 60,000 100,000 500 120 Total overhead costs P860,000 The following data regarding two product lines of the company are presented: Product AB Product CD 200 1,600 4. Direct labor hours Number of batches Engineering/design changes 12 24 Product AB are produced in large batches, while Product CD are as specialty line that only a few customers buy. What is the overhead to be allocated to each product line using DLH as the only cost driver? Product AB & P13,760 b. P13,760 c P14,000 d. P14,760 Product CD P1,270 P1,720 P7,120 P2,170
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:-Based Costing (ABC)
pools and drivers has been developed:
lines based on their relative shares of direct labor hours (DLH). The
company works about 100,000 DLH per month. The company is
1. Tower Company incurs about P860,000 in manufacturing overhead
driven by other activities. The following information regarding cost
costs each month which had been allocated to individual product
der 8
287
MULTIPLE CHOICES-COMPUTATIONAL
Ost
st
Cocerned that using DLH is inappropriate because some costs are
Amount in
Aтount of
Activity
Cost Driver
Рol
Direct labor hours
Number of batches
Engineering/ design changes
P520,000
280,000
60,000
100,000
500
120
Total overhead costs
P860,000
The following data regarding two product lines of the company are
presented:
Product AB
Product CD
1,600
200
Direct labor hours
4
12
Number of batches
24
Engineering/design changes
Product AB are produced in large batches, while Product CD are as
specialty line that only a few customers buy.
what is the overhead to be allocated to each product line using DLH
as the only cost driver?
Product AB
& P13,760
h P13,760
e. P14,000
d. P14,760
Product CD
P1,270
P1,720
P7,120
P2,170
Transcribed Image Text:2. Using the data in No. 1, the overhead to be allocated to each product
288
Chapter
line using the Activity-Based Costing (ABC) is:
Product CD
P14,760
P14,760
P19,760
P14,670
Product AB
a. P11,560
b. P10,760
c. P11,560
d. P10,760
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