Exercise 4: Point System in Overhead Rate Computation
Estimate Points Total Estimate
d Per Unit Points d FOH Product Quantity Point Per Unit Product
A 6,000 5 30,000 P 7.50 225,000 P 37.50
B 8,000 3 24,000 7.50 180,000 22.50
54,000 P405,000
*₱ 405,000/54,000 points = ₱ 7.50 per points
Exercise 5: Computation for Overhead Variance and Journal Entries
a. Compute for the factory overhead variance.
Factory overhead variance:
Actual factory overhead ₱ 470,500 Less: Actual factory overhead 58,000 hours x ₱ 8 464,000 Factory overhead Variance – underapplied ₱ 6,500
b. Make the journal entries that relate to factory overhead in 19F.
Work in Process 464,000
Applied Factory Overhead 464,000 To charge overhead to production
Actual Factory Overhead 470,500
Cash and other credits 470,500 To record Factory Overhead incurred
Applied Factory Overhead 464,000
Factory Overhead Variance 6,500 Actual Factory Overhead 470,500 To close Factory Overhead applied & control Cost of Goods Sold 6,500 Factory Overhead Variance 6,500 To close the Variance to Cost of Goods Sold
Exercise 6: Fixed Budget Analysis
Analyze the factory overhead variance of Golden Manufacturers, Inc. based on