4. Jose Corp makes bottles using the latest automated technology. The company applies FOH cost to products on the basis of machine hours. The following are estimates used to determine the factory overhead rate at the start of the year.

Machine hours 150,000
Factory Overhead Cost 1,800,000
The company cost records shows the following actual cost incurred for the year,
Machine hours 120,000
Factory Overhead Cost 1,700,000
Raw Materials 60,000
Work in Process (Includes FOH applied of P72,000) 200,000
Finished Goods (includes FOH applied of P360,000) 1,000,000
Cost of Goods Sold (includes FOH applied of P1,008,000) 2,800,000

• Compute the FOH rate
• Compute the under or applied Factory Overhead
• Assume the variance is material, what is the adjustment of the COGS?
• Assume the variance is material, what is the variance share of the Finished goods inventory account?
• Assume the variance is material, what is the variance share of the Work in Process account?

5. Ethel corp has the following data for the year 2021:

Estimated FOH		40,000	+(P 2 x Mhr)
Estimated machine hours	5,000
Assume that Ethel corp has work on three jobs
01, 02 and 03, last year. 1500 machine hours were spent for JOB 01
		2,000 machine hours spent for JOB 02
		1,700 machine hour spent for JOB 03
The actual factory overhead is 56,000 using 5,200 machine hours.

• What is predetermined FOH?
• What is the expected FOH for an actual level of activity 5,200 machine hours?
• What is the factory overhead to job03?
• What is the total under or over applied Factory overhead?