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The Ladytinger Manutacturing Company has two production departments (fabrication and assembly) and three service departments (factory administration, factory maintenance, and factory cafeteria). A summary of costs and other data for each department prior to allocation of service department costs for the year ended June 30, 2011, appears below. The costs of the factory administration department, factory maintenance department, and factory cafeteria department are allocated on the basis of direct labor hours, square footage occupied, and humber of employees, respectively. Factory Fabrication Assembly Administration Maintenance Cafeteria Factory Factory P1,950,000 P2,050,000 Actual Direct Labor Costs Actual Direct Materials Costs 3,130,000 950,000 Estimated Factory OH Costs Before allocation Direct labor hours Number of employees Square footage occupied 1,650,000 1,850,000 562,500 280 88,000 P160,000 P203,200 437,500 200 31,000 12 27,000 8 P240,000 42,000 20 72,000 1,750 2,000 4,800 Assuming that Ladyfinger elects to distribute service department costs to other service departments, as well as the production departments (starting with the service department with the greatest total costs), determine the applied factory þverhead rate of Fabrication Department using direct labor hours of 562,500 as the basis.

The Ladytinger Manutacturing Company has two production departments (fabrication and assembly) and three service departments (factory administration, factory maintenance, and factory cafeteria). A summary of costs and other data for each department prior to allocation of service department costs for the year ended June 30, 2011, appears below. The costs of the factory administration department, factory maintenance department, and factory cafeteria department are allocated on the basis of direct labor hours, square footage occupied, and humber of employees, respectively. Factory Fabrication Assembly Administration Maintenance Cafeteria Factory Factory P1,950,000 P2,050,000 Actual Direct Labor Costs Actual Direct Materials Costs 3,130,000 950,000 Estimated Factory OH Costs Before allocation Direct labor hours Number of employees Square footage occupied 1,650,000 1,850,000 562,500 280 88,000 P160,000 P203,200 437,500 200 31,000 12 27,000 8 P240,000 42,000 20 72,000 1,750 2,000 4,800 Assuming that Ladyfinger elects to distribute service department costs to other service departments, as well as the production departments (starting with the service department with the greatest total costs), determine the applied factory þverhead rate of Fabrication Department using direct labor hours of 562,500 as the basis.

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 28E: Minor Co. has a job order cost system and applies overhead based on departmental rates. Service...
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The Ladyfinger Manufacturing Company has two production departments (fabrication and assembly) and three service departments (factory administration, factory maintenance, and factory cafeteria). A summary of costs and other data for each department prior to allocation of service department costs for the year ended June 30, 2011, appears below. The costs of the factory administration department, factory maintenance department, and factory cafeteria department are allocated on the basis of direct labor hours, square footage occupied, and number of employees, respectively. Factory Fabrication Assembly Administration Maintenance Cafeteria Factory Factory Actual Direct Labor Costs Actual Direct Materials Costs P1,950,000 P2.050,000 3,130,000 950,000 Estimated Factory OH Costs Before allocation 1,650,000 1,850,000 P160,000 P203,200 P240,000 Direct labor hours Number of employees Square footage occupied 562,500 437,500 31,000 27,000 42,000 20 280 200 12 8 88,000 72,000 1,750 2,000 4,800 Assuming that Ladyfinger elects to distribute service department costs to other service departments, as well as the production departments (starting with the service department with the greatest total costs), determine the applied factory þverhead rate of Fabrication Department using direct labor hours of 562,500 as the basis.
Transcribed Image Text:The Ladyfinger Manufacturing Company has two production departments (fabrication and assembly) and three service departments (factory administration, factory maintenance, and factory cafeteria). A summary of costs and other data for each department prior to allocation of service department costs for the year ended June 30, 2011, appears below. The costs of the factory administration department, factory maintenance department, and factory cafeteria department are allocated on the basis of direct labor hours, square footage occupied, and number of employees, respectively. Factory Fabrication Assembly Administration Maintenance Cafeteria Factory Factory Actual Direct Labor Costs Actual Direct Materials Costs P1,950,000 P2.050,000 3,130,000 950,000 Estimated Factory OH Costs Before allocation 1,650,000 1,850,000 P160,000 P203,200 P240,000 Direct labor hours Number of employees Square footage occupied 562,500 437,500 31,000 27,000 42,000 20 280 200 12 8 88,000 72,000 1,750 2,000 4,800 Assuming that Ladyfinger elects to distribute service department costs to other service departments, as well as the production departments (starting with the service department with the greatest total costs), determine the applied factory þverhead rate of Fabrication Department using direct labor hours of 562,500 as the basis.
Grace Company manufactures picture frames of all sizes and shapes and uses job-order costing system. There is always some spoilage in each production run. The following costs relate to the current run: P 160,000 Estimated overhead (exclusive of spoilage) Spoilage (estimated) Sales value of spoiled frames 25,000 11,500 100,000 Labor hours The actual cost of a spoiled picture frame is P7.00. During the year, 170 frames are considered spoiled. Each spoiled frame can be sold for P4. The spoilage is considered a part of all jobs (factory overhead). What amount should be debited to Factory Overhead Control to record spoilage pertaining to unrecovered cost?
Transcribed Image Text:Grace Company manufactures picture frames of all sizes and shapes and uses job-order costing system. There is always some spoilage in each production run. The following costs relate to the current run: P 160,000 Estimated overhead (exclusive of spoilage) Spoilage (estimated) Sales value of spoiled frames 25,000 11,500 100,000 Labor hours The actual cost of a spoiled picture frame is P7.00. During the year, 170 frames are considered spoiled. Each spoiled frame can be sold for P4. The spoilage is considered a part of all jobs (factory overhead). What amount should be debited to Factory Overhead Control to record spoilage pertaining to unrecovered cost?
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