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I. Universal Manufacturing Company produced variety of products all of which is processed in two departments. The company presented to you the following budgeted information for the current year to help the production manager in determining the cost of its prime products. Budgeted Overhead Budgeted Labor Hours Budgeted Machine Hours Department 1 P486,000 27,000 4,200 Department 2 P564,000 3,000 65,800 Actual cost information for each unit of product is presented below: Department 2 Department 1 P35.00 Direct Materials P10.00 Direct Labor Hours 1.5 hours 30 mins P40 per hour PO.2 MH P50 per hour P1.5 MH Direct Labor Rate Machine Hours Overhead Incurred P148,000 P210,000

I. Universal Manufacturing Company produced variety of products all of which is processed in two departments. The company presented to you the following budgeted information for the current year to help the production manager in determining the cost of its prime products. Budgeted Overhead Budgeted Labor Hours Budgeted Machine Hours Department 1 P486,000 27,000 4,200 Department 2 P564,000 3,000 65,800 Actual cost information for each unit of product is presented below: Department 2 Department 1 P35.00 Direct Materials P10.00 Direct Labor Hours 1.5 hours 30 mins P40 per hour PO.2 MH P50 per hour P1.5 MH Direct Labor Rate Machine Hours Overhead Incurred P148,000 P210,000

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter4: Job-order Costing And Overhead Application
Section: Chapter Questions
Problem 57P: Overhead Rates, Unit Costs Folsom Company manufactures specialty tools to customer order. There are...
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I. Universal Manufacturing Company produced variety of products all of which is processed in two departments. The company presented to you the following budgeted information for the current year to help the production manager in determining the cost of its prime products. Budgeted Overhead Budgeted Labor Hours Budgeted Machine Hours Department 1 P486,000 27,000 4,200 Department 2 P564,000 3,000 65,800 Actual cost information for each unit of product is presented below: Department 1 P35.00 Department 2 Direct Materials P10.00 Direct Labor Hours Direct Labor Rate 1.5 hours 30 mins P40 per hour P50 per hour P1.5 MH Machine Hours P0.2 MH Overhead Incurred P148,000 P210,000 During the year, the company produced 5,000 units. Determine the following: A. If plant-wide rate is used: 1) Total Overhead Applied based on Direct Labor Hours 2) Total costs of producing 5,000 units 3) Total cost per unit. B. If departmental rate is used: 1) Total Overhead applied using the most appropriate basis 2) Total costs of producing 5,000 units 3) Total cost per unit.
Transcribed Image Text:I. Universal Manufacturing Company produced variety of products all of which is processed in two departments. The company presented to you the following budgeted information for the current year to help the production manager in determining the cost of its prime products. Budgeted Overhead Budgeted Labor Hours Budgeted Machine Hours Department 1 P486,000 27,000 4,200 Department 2 P564,000 3,000 65,800 Actual cost information for each unit of product is presented below: Department 1 P35.00 Department 2 Direct Materials P10.00 Direct Labor Hours Direct Labor Rate 1.5 hours 30 mins P40 per hour P50 per hour P1.5 MH Machine Hours P0.2 MH Overhead Incurred P148,000 P210,000 During the year, the company produced 5,000 units. Determine the following: A. If plant-wide rate is used: 1) Total Overhead Applied based on Direct Labor Hours 2) Total costs of producing 5,000 units 3) Total cost per unit. B. If departmental rate is used: 1) Total Overhead applied using the most appropriate basis 2) Total costs of producing 5,000 units 3) Total cost per unit.
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