1.Ulysses Company estimates overhead of P225,000 for next year. An estimated 25,000 units will be produced, with materials cost of P500,000. Conversion will require an estimated 56,250 direct labor hours at a cost of P8 per hour and an estimated 75,000 machine hours.

Required:

Compute the predetermined overhead rate to be used in applying factory overhead to production on each of the following bases:

(a) Units of production

(b) Materials cost

(c) Direct labor hours

(d) Direct labor cost

(e) Machine hours

2. Theoretical capacity for Rolly Company is 80,000 direct labor hours, and normal capacity is 50,000 direct labor hours. The actual capacity attained for the fiscal year ended June 30, 2020 was 43,000 hours. It is estimated that 40,000 hours will be worked in 2021. Fixed Factory Overhead is P400,000 and variable factory overhead is P6.69 per direct labor hour.

Required:

(a) Using the normal capacity, compute (a) the factory overhead rate, and (b) the fixed part of the factory overhead rate

(b) Using expected actual capacity for 2021, compute (a) the factory overhead rate, and (b) the fixed part of the factory overhead rate.

Answer rating: 100% (QA)

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