Trenton Company has two departments (Processing and Packaging) and uses a job-order costing system. Baker applies overhead in Processing based on machine hours and on direct labor cost in Packaging. The following information is available for July: Processing Packaging Machine hours 2,500 1,000 Direct labor cost P44,500 P23,000 Applied overhead P55,000 P51,750 Refer to Trenton Co. What is the overhead application rate for Packaging?
Trenton Company has two departments (Processing and Packaging) and uses a job-order costing system. Baker applies overhead in Processing based on machine hours and on direct labor cost in Packaging. The following information is available for July: Processing Packaging Machine hours 2,500 1,000 Direct labor cost P44,500 P23,000 Applied overhead P55,000 P51,750 Refer to Trenton Co. What is the overhead application rate for Packaging?
Trenton Company has two departments (Processing and Packaging) and uses a job-order costing system. Baker applies overhead in Processing based on machine hours and on direct labor cost in Packaging. The following information is available for July: Processing Packaging Machine hours 2,500 1,000 Direct labor cost P44,500 P23,000 Applied overhead P55,000 P51,750 Refer to Trenton Co. What is the overhead application rate for Packaging?
Refer to Trenton Co. What is the overhead application rate for Packaging?
Transcribed Image Text:Trenton Company has two departments (Processing and Packaging) and
uses a job-order costing system. Baker applies overhead in Processing
based on machine hours and on direct labor cost in Packaging. The
following information is available for July:
Processing
Packaging
Machine hours
2,500
1,000
Direct labor cost
P44,500
P23,000
Applied overhead
P55,000
P51,750
Refer to Trenton Co. What is the overhead application rate for
Packaging?
P 2.25
O P0.44
P23.00
P51.75
Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.
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