Picasso Manufacturing Co. uses a normal cost system that applies overhead based on machine hours. The following
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Question:
Picasso Manufacturing Co. uses a normal cost system that applies overhead based on machine hours. The following 2020 budgeted data are available:
Variable factory overhead at 50,000 machine hours: P625, 000
Variable factory overhead at 75.000 machine hours: 937,500
Fixed factory overhead at 50,000 machine hours: 720,000
Practical capacity is 90,000 machine hours; expected capacity is 2/3 of practical. All capacity levels are within the relevant range.
During 2020, Picasso records 55,000 machine hours and P1,355,000 of overhead costs.
- Determine the variable overhead rate at practical capacity
- Determine the variable overhead rate at expected capacity
- Determine the fixed overhead rate at practical capacity
- Determine the fixed overhead rate at expected capacity.
- Determine the applied overhead at practical capacity
- Determine the applied overhead at expected capacity
- Calculate the overapplied or underapplied overhead at practical capacity
- Calculate the overapplied or underapplied overhead at expected capacity.
Expert Answer:
Picasso Manufacturing Co Overhead Rate and Applied Overhead Calculations We can use the provided information to calculate the overhead rates and applied overhead for Picasso Manufacturing Co at both p... View the full answer
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