Don Corp. estimates that its production for the coming year will be 10,000 widgets, which  is 80% of normal capacity, with the following unit costs: materials, P40; direct labor, P60.  Direct labor is paid at the rate of P24 per hour. The widget shaper, the most expensive piece  of machinery, must be run for 20 minutes to produce one widget. Total estimated overhead is  expected to consist of P400,000 for variable overhead and P400,000 for fixed overhead.

 Required: Compute the overhead rate for each of the following bases, using the expected actual  capacity activity level: 

a. physical output 

b. materials cost 

c. direct labor cost 

d. direct labor hours 

e. machine hours

Answer rating: 100% (QA)

Solution 1 Estimated ... View the full answer