Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

DEF Company budgets sales at P2,000,000 and expects a net income before tax of 10% of the sales. Expenses are estimated as follows: Selling

DEF Company budgets sales at P2,000,000 and expects a net income before tax of 10% of the sales. Expenses are estimated as follows:
Selling    15% of sales
Administrative         9% of sales
Finance    1% of sales

Labor is expected to be 40% of the total manufacturing cost. Factory overhead is to be applied at 75% of direct labor cost.

Inventories are to be as follows:
                                                  January 1  December 31
Materials             250,000        300,000
Work in process    200,000        320,000
Finished goods     350,000         400,000

1. Materials purchases will be:

2. Cost of goods sold will be:

3. Factory overhead will amount to:

4. Total manufacturing cost will be:


GHI Company is preparing a flexible budget for 20X3 and the following maximum capacity estimates for department M are available:
                                            At Maximum Capacity
Direct labor hours   60,000
Variable factory overhead  P150,000
Fixed factory overhead  P240,000

 Assume that Dean's normal capacity is 80% of maximum capacity. What would be the total factory overhead rate, based on direct-labor hours, in flexible budget at normal capacity? 

Step by Step Solution

3.42 Rating (155 Votes )

There are 3 Steps involved in it

Step: 1

DEF Company 1 Materials purchases will be Materials purchases Materials used Beginning materials inv... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

College Mathematics For Business Economics, Life Sciences, And Social Sciences

Authors: Raymond Barnett, Michael Ziegler, Karl Byleen, Christopher Stocker

14th Edition

0134674146, 978-0134674148

More Books

Students also viewed these Accounting questions

Question

What does the POSIX API provide for synchronization?

Answered: 1 week ago