SOLVING

1. Ino Corp. estimates that its production will be 10,000 widgets for the coming year, which is 80% of normal capacity, with the following unit costs: materials, Php40; direct labor, Php60. At the rate of Php24 per hour, direct labor is paid for. The widget shaper, the mostexpensive piece of machinery, must be run for 20 minutes to produce one widget. Total estimated overhead is expected to consist of Php400,000 for variable overhead and Php400,000 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

2.A controller is interested in analyzing the fixed and variablecosts of indirect labor as related to direct labor hours.The following data have been accumulated:

Month March April ..... May....... June July August Indirect Labor Cost Direct Labor Hours Php2,880 425 3,256 545 2,820 440 3,225 560 3,200 540 3,200 495