ACTIVITY_ACCOUNTING FOR FACTORY OVERHEAD

NAME: Ramirez, Marc Timothy D._____________________________________________________/15

1. Job no. 629 was sold at a gross margin of 50% or for P 36,000. Its cost includes direct materials
of P 8,000 with factory overhead applied at 60% of direct labor cost. How much factory overhead
was charged to the job? ₱6,000

2. The Amazon Manufacturing Co. uses the point system in charging overhead to its three products
because of variations in processing and other specifications. The following data are given on the
products:

Product A Product B Product C

Estimated output (units) 8,000 5,000 3,000
Assigned number of points 6 5 4
Budgeted factory overhead for the year is P 297,500.

The overhead rate per unit of each of the products must be: (3pts)
A=21 B=17.5 C=14
3. Budgeted Factory Overhead for 2013 is P 400,000 based on normal capacity of 50,000 labor
hours. Fixed factory overhead is P 40,000. How much is the budget allowance on actual capacity
of 45,000 labor hours? ₱364,000

4. Assume that in no. 3 above, budgeted, and actual capacities for the first quarter of 2013 were
10,000 and 9,000 labor hours, respectively. How much is the budget allowance for the quarter?
₱74,800

5. Factory overhead variance is under absorbed P 3,000 and spending variance is favourable P2,000.
Budget allowance on actual capacity is P 30,000. How much is applied factory overhead?
₱25,000

6. At 10,000 units of production, idle capacity variance is unfavourable P 4,500 while at 30,000
units, it is favourable P 1,500. The fixed cost rate based on normal units of production ought to
be? ₱0.30

7. Fixed and variable overhead rates are P 5 and P 8per unit of output (respectively) based on
budgeted production volume for 2013 of 60,000 units. The company produced 58,000 units and
incurred P 765,200 of factory overhead. The unfavourable (favourable) spending and idle capacity
variance must be: (2pts)
Spending variance= 1,200 (unfavourable) Idle Variance= 10,000 (unfavourable)
8. The factory overhead rate is P 20 per direct labor hour. The company’s budget for 2013 shows
budgeted units of production of 30,000 with three (3) hours of labor required to finish a unit. For
2013, the company produced 32,000 units expending 96,500 labor hours and incurring P
1,863,300 of overhead. Budget allowance based on actual capacity is P 1,867,500 and idle
capacity variance is P 32,500. What is the variable overhead rate? ₱15
9. Factory overhead variance is over absorbed P 9,000. The factory overhead rate of P 10 per labor
hours was arrived at by using an estimated capacity of 20,000 labor hours. The fixed overhead rate
is P 3 per labor hour. With utilized capacity equal to 18,900 labor hours, how much factory
overhead must have been incurred? ₱180,000

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