ACTIVITY/ASSESSMENT

1. Required:
a. If Squid Game uses a predetermined plantwide overhead rate with direct labor-hours as
the allocation base, how much manufacturing overhead would be applied to Job 456?
 Predetermined plantwide overhead
= P 600,000/50,000 = P 12 per direct labor-hours
 Manufacturing overhead applied to job 456
= P 12 x 13 = P 156 of overhead applied to Job 456
b. If Squid Game uses predetermined departmental overhead rates with direct labor-hours as
the allocation base in Assembly and machine-hours as the allocation base in Fabrication,
how much total manufacturing overhead cost would be applied to Job 456?
 Assembly overhead rate
= P 300,000 / 30,000 = P 10 per direct labor hour
 Fabrication overhead rate
= P 300,000 / 40,000 = P 7.5 per MH
 Manufacturing overhead applied to job 456
Job 456 (1) (2) Applied Overhead
Overhead Rate Actual Hours Used (1) x (2)
Assembly Department P 10 per DLH 5 hours P 50
Fabrication Department P 7.5 per MH 14 hours 105
Total applied overhead P 155

c. Assume that Squid Game uses the departmental overhead rates mentioned in requirement
2 and that Job 456 includes 60 units. What is the unit product cost for Job 456?  
Job 456 Assembly Fabrication Total
Direct Material P 100 P 50 150
Direct Labor 50 40 90
Overhead 50 105 155
Total job cost (a) 395
No. of units in Job 456 50
(b)
Unit product cost (a/b) P 7.9