Gerry's Electronics manufactures mouses for computers. In April, the two production departments had budgeted allocation bases of P5,000 machine hours in Department 1 and 2,500 direct manufacturing labor hours in Department 2. The budgeted manufacturing overheads for the month were P23,000 and P25,000, respectively. For Job 100, the actual costs incurred in the two departments were as follows: Department 1 Department 2 Direct materials purchased on account P44,000 P71,000 Direct materials used 13,000 5,400 Direct manufacturing labor 21,000 21,400 Indirect manufacturing labor 4,400 3,600 Indirect materials used 3,000 1,900 Lease on equipment 6,500 1,500 Utilities 400 500 Job 100 incurred 500 machine hours in Department 1 and 150 manufacturing labor hours in Department 2. The company uses a budgeted departmental overhead rate for applying overhead to production. What is the budgeted manufacturing overhead rate for Department 1? P 4.60 per hour P 5.00 per hour P 9.20 per hour P10.00 per hour
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Gerry's Electronics manufactures mouses for computers. In April, the two production departments had budgeted allocation bases of P5,000 machine hours in Department 1 and 2,500 direct manufacturing labor hours in Department 2. The budgeted manufacturing
Department 1
Department 2
Direct materials purchased on account
P44,000
P71,000
Direct materials used
13,000
5,400
Direct manufacturing labor
21,000
21,400
Indirect manufacturing labor
4,400
3,600
Indirect materials used
3,000
1,900
Lease on equipment
6,500
1,500
Utilities
400
500
Job 100 incurred 500 machine hours in Department 1 and 150 manufacturing labor hours in Department 2. The company uses a budgeted departmental overhead rate for applying overhead to production.
What is the budgeted manufacturing overhead rate for Department 1?
P 4.60 per hour
P 5.00 per hour
P 9.20 per hour
P10.00 per hour
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