BARIACTO, DANIELA ROSE G.

06 QUIZ 1

BSA601 STRATEGIC COST MANAGEMENT

A. Compute for the pool rates and overhead cost allocated to each product

ACTIVITY CENTER SOLUTION POOL RATES

Utilities P 500,000/ 50,000 P 10 per machine hour
Scheduling and Setup P 480,000/ 800 P 600 per setup
Materials Handling P 931,000/ 1,900,000 P 0.49 per pound of materials

Overhead cost for chairs, cabinets, and onyx tables of Blue Furniture.

CHAIRS CABINETS ONYX TABLES TOTAL

UTILITIES
A. 20,000 x P 10 P 200,000
B. 15,000 x P 10 P 150,000
C. 15,000 x P 10 P 150,000
P 500,000

SCHEDULING AND SETUP

A. 150 x P 600 P 90,000
B. 250 x P 600 P 150,000
C. 400 x P 600 P 240,000
P 480,000

MATERIALS HANDLING
A. 600,000 x P 0.49 P 294,000
B. 500,000 x P 0.49 P 245,000
C. 800,000 x P 0.49 P 392,000
P 931,000
TOTAL P 584,000 P 545,000 P 782,000 P 1,911,000

B. Using the allocated total overhead cost in the previous item, as the budgeted annual overhead,
compute for the combined overhead cost applied to job #732. Show your solution using normal costing
and illustrate the calculated overhead cost journal entry.

Combined Overhead Cost = Budgeted Factory Overhead/ Budgeted Direct Labor Hours

= P 1,911,000/ 141,000 DLH

= P 13.55 per DLH

The overhead cost applied to job #732 is P 6,775 (500 hours x P13.55 per DLH).
Journal Entry:

Work-In-Process Inventory 6,775

Factory Overhead 6,775