Answered: Under direct method, how much is the…

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Accounting

Under direct method, how much is the total overhead under machining departmen

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter13: Budgeting And Standard Costs

Section: Chapter Questions

Problem 13.2.8P: Budgeted income statement and supporting budgets The budget director of Jupiter Helmets Inc., with...

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Question

Prism Company has two service departments: security departments and maintenance departments that give services to two producing departments: machining department and assembling department. Security department costs will be allocated using the number of employees and maintenance department costs will be allocated using direct labor hours. For calculation of predetermined rate, machine hours and direct labor hours are used for machining and assembling departments, respectively.

Budgeted OH
DL Hours
# of employees
Machine Hours
Machining
Assembling
Security
Maintenance
Machining Assembling
P350,000
P200,0000
180,000
120,000
5,000
3,000
100,000
100,000
Services provided by:
Security
35%
45%
20%
100%
Maintenance
40%
30%
30%
100%
Security
P75,000
Maintenance
P80,000
2,000
Under direct method, how much is the total overhead under machining department?

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