Determine the applied factory overhead rate of department using direct labor hours of 562,000 as the basis. The Ladyfinger Manufacturing Company has two production departments (fabrication and assembly) and threeservice departments (factory administration, factory maintenance, and factory cafeteria). A summary of costsand 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, andfactory cafeteria department are allocated on the basis of direct labor hours, square footage occupied, andnumber of employees, respectively.FactoryFabrication Assembly Administration MaintenanceFactoryCafeteriaFactoryActual Direct Labor CostsActual Direct Materials CostsP1,950,000 P2,050,0003,130,000950,000Estimated Factory OH CostsBefore allocation1,650,0001,850,000P160,000P203,200P240,000Direct labor hoursNumber of employeesSquare footage occupied42,000562,500280437,50020031,00027,0001282088,00072,0001,7502,0004,800Assuming that Ladyfinger elects to distribute service department costs to other service departments, as well asthe production departments (starting with the service department with the greatest total costs), determine theapplied factory þverhead rate of Fabrication Department using direct labor hours of 562,500 as the basis.

Definition: Factory overhead: It includes all manufacturing costs except direct material cost and…

Answered: Determine the applied factory overhead…

Business

Accounting

Determine the applied factory overhead rate of department using direct labor hours of 562,000 as the basis.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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