Gapas, Daniel John L.

Cost Accounting and Control

E-TIVITY 10
Problem 1

1) Material Cost = Estimated Factory Overhead

x 100
Estimated Direct Material Cost

= 1,000,000
x 100
800,000

= 125% of Direct Material Cost

2) Units of Production = Estimated Factory Overhead

Estimated Units of Production

= 1,000,000
20,000

= 50/unit

3) Machine Hours = Estimated Factory Overhead

Estimated Machine Hours

= 1,000,000
160,000

= 6.25/Machine Hour

4) Direct Labor Cost = Estimated Factory Overhead

x 100
Estimated Direct Labor Cost

= 1,000,000
x 100
500,000

= 200% of Direct Labor Cost

5) Direct Labor Hours = Estimated Factory Overhead

Estimated Direct Labor Hours

= 1,000,000
50,000

= 20/ Direct Labor Hour

Problem 10
1. HIGH-LOW METHOD
Variable rate per hour = 270,000-252,000
60,000-48,000
= 18,000
12,000
= P1.50/direct labor hr.
2.
HIGH LOW
Total Cost 270,000 252,000
Less: Variable portion
60,000 x P1.50 90,000
48,000 x P1.50 72,000
Fixed Portion P180,000 P180,000

3.
Actual Factory Overhead P273,000
Budgeted allowance on actual
hours:
Fixed P180,000
Variable (60,000 x 90%) x 5.25 81,000 261,000
Spending Variance- Unfavorable P12,000

4.
Budget allowed on actual hours P261,000
Applied FO (60,000 x 90%) x P5. 25 283,500
Idle capacity variance-Favorable P(22,500)

Problem 11
A.
Actual Factory Overhead P30,500
Applied Factory Overhead 39,700
Overapplied Factory Overhead P(9,200)

Cost of Goods Sold 32,000 x 9,200 P7,416

 39,700
Work in Process 3,500 x 9,200 811

39,700

Finished Goods 4,200 x 9,200 973

39,700

Total 39,700 P9,200

B.
P
Date Explanation R Debit Credit
 
     Factory Overhead Applied         3 9 7 0 0                
 
      Cost of Goods Sold                           7 4 1 6
 
      Finished Goods                             9 7 3
 
      Work in Process                             8 1 1
 
      Factory Overhead Control                         3 0 5 0 0
      To close FOH accounts                                  

Problem 12
1.
PRODUCT A PRODUCT B
Direct Materials 50 x P120 P6,000 100 x120 P12,000
Direct Labor 6,000 18,000
Factory 100 x P25 2,500 300 x P25 7,500
Overhead
Total P14,500 P37,500
 Manufacturing
Cost
No. of Units 50 100
Cost per Unit P290/unit P375/unit

2.
PRODUCT A PRODUCT B
Direct Materials 50 x P120 P6,000 100 x120 P12,000
Direct Labor 6,000 18,000
Factory
Overhead:
Material 20 x 50 1,000 40 x P50 2,000
Handling
Scheduling and 200 x P5 1,000 200 x 7 1,400
setup
Design Section 3 x P107.50 322.50 5 x P107.50 537.50
No. of Parts 6 x 100 600 10 x 100 1,000
Total Cost P14,922.50 P34,937.50
No. of Units 50 100
Cost per Unit P298.45/unit P349.38/unit