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    Aaaa

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    diane camansag
    Here are the key steps to analyze the variances in the factory overhead control account: 1. Calculate the actual factory overhead applied to Work in Progress (WIP) based on the debits to the factory overhead control account - which is P35,900. 2. Calculate the factory overhead that should have been applied to WIP based on the pre-determined overhead application rate and the actual direct labor hours or units of production - which is P31,400. 3. Compute the variance by taking the actual overhead applied and subtracting the applied overhead - which results in a favorable variance of P4,500. This variance occurred because the actual overhead incurred for the period of P35,900 was less than

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    Aaaa

    Uploaded by

    diane camansag
    38 views7 pages
    Here are the key steps to analyze the variances in the factory overhead control account: 1. Calculate the actual factory overhead applied to Work in Progress (WIP) based on the debits to the factory overhead control account - which is P35,900. 2. Calculate the factory overhead that should have been applied to WIP based on the pre-determined overhead application rate and the actual direct labor hours or units of production - which is P31,400. 3. Compute the variance by taking the actual overhead applied and subtracting the applied overhead - which results in a favorable variance of P4,500. This variance occurred because the actual overhead incurred for the period of P35,900 was less than

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    aaaa (1).xlsx

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    Here are the key steps to analyze the variances in the factory overhead control account: 1. Calculate the actual factory overhead applied to Work in Progress (WIP) based on the debits to the factory overhead control account - which is P35,900. 2. Calculate the factory overhead that should have been applied to WIP based on the pre-determined overhead application rate and the actual direct labor hours or units of production - which is P31,400. 3. Compute the variance by taking the actual overhead applied and subtracting the applied overhead - which results in a favorable variance of P4,500. This variance occurred because the actual overhead incurred for the period of P35,900 was less than

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    38 views7 pages

    Aaaa

    Uploaded by

    diane camansag
    Here are the key steps to analyze the variances in the factory overhead control account: 1. Calculate the actual factory overhead applied to Work in Progress (WIP) based on the debits to the factory overhead control account - which is P35,900. 2. Calculate the factory overhead that should have been applied to WIP based on the pre-determined overhead application rate and the actual direct labor hours or units of production - which is P31,400. 3. Compute the variance by taking the actual overhead applied and subtracting the applied overhead - which results in a favorable variance of P4,500. This variance occurred because the actual overhead incurred for the period of P35,900 was less than

    Copyright:

    © All Rights Reserved
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    Download as xlsx, pdf, or txt
    of 7

    Task 2.

    Liters Made 10,000.00 14,000.00 18,000.00


    Costs:
    Variable Costs:
    Direct Materials 1,200.00 1,680.00 2,160.00
    Direct Labor 1,000.00 1,400.00 1,800.00
    Overheads 1,600.00 2,240.00 2,880.00
    Fixed Costs
    Indirect Labor 700.00 700.00 700.00
    Overheads 1,600.00 1,600.00 1,600.00
    Total Cost 6,100.00 7,620.00 9,140.00
    Cost Per Liter 0.61 0.54 0.51

    Explanation:
    Change in no. of liters made increases the variable costs per total however decreases the fixed costs per liter.

    Task 2.2

    There would be no changes in the figures presented above since the fixed costs will only increase once the
    activity level reach an additional 10,000 in volume which is 20,0000.
    Entries:

    1.) WIP Job Order 9 54,000.00


    Materials 24,000.00
    Labor 10,000.00
    Overhead 20,000.00

    FOHC 1,700.00
    Spoiled Goods 1,000.00
    WIP 2,700.00

    2.) WIP BALANCE 54,000.00


    WIP LOST (2,700.00)
    51,300.00
    Good units 1,900.00
    Cost Per Unit 27
    Code Beg Bal. Debits Credits
    A Finished Goods 9,800.00 ??
    B Work In Progress 4,070.00 79,800.00 ??
    C Materials & Supplies 40,700.00 24,800.00 29,800.00
    D Buildings 48,000.00 - -
    E Accumulated Depreciation - Buildings (6,000.00) - 2,400.00
    F Machinery & Equipment 96,000.00 - -
    G Accumulated Depreciation - Machinery & Equipment (37,500.00) - 9,600.00
    H Office Equipment 3,200.00 - -
    I Accumulated Depreciation - Office Equipment (1,000.00) - 480.00

    Transactions Debit Credit


    C Materials & Supplies 24,800.00
    Cash/AP 24,800.00

    Factory Overhead Control 20,100.00


    Cash/AP 20,100.00

    Marketing Expenses 25,050.00


    Cash/AP 25,050.00

    Administrative Expenses 19,700.00


    Cash/AP 19,700.00

    B Work In Progress 33,750.00


    Factory Overhead Control 3,950.00
    C Materials & Supplies 29,800.00

    Factory Overhead Control 1,800.00


    Marketing Expenses 360.00
    Administrative Expenses 240.00
    e Accumulated Depreciation - Buildings 2,400.00

    Factory Overhead Control 9,600.00


    g Accumulated Depreciation - Machinery & Equipment 9,600.00

    Marketing Expenses 192.00


    Administrative Expenses 288.00
    i Accumulated Depreciation - Office Equipment 480.00

    A/R 144,900.00
    Sales 144,900.00

    Sales Ret. & Allowances 1,300.00


    A/R 1,300.00

    AP 75,000.00
    Cash 75,000.00

    Payroll 21,800.00
    Cash 21,800.00

    b Work In Progress 18,600.00


    Factory Overhead Control 4,400.00
    Payroll 21,800.00

    Cash 116,900.00
    A/R 116,900.00

    b Work In Progress 27,450.00


    Factory Overhead Control 27,450.00
    End Bal. Finished Goods (Units)
    2,800.00 20,700.00
    20,400.00
    2,500.00

    Finished Goods (Peso)


    9,800.00 9,800.00
    79,430.00 69,695.93
    9,734.07

    Sales 144,900.00
    Sales Ret & Allowances. 1,300.00
    Net Sales 146,200.00

    Cost of Goods Sold:


    Finished Goods, Beginning 9,800.00
    Add: Cost of Goods Manufactured
    WIP, Beg 4,070.00
    Materials 33,750.00
    Labor 18,600.00
    Overhead 27,450.00
    WIP, End (4,440.00) 79,430.00
    Less: Finished Goods, Ending 9,734.07 79,495.93
    Gross Profit 66,704.07

    Marketing Expenses (25,602.00)


    Administrative Expenses (20,228.00) (45,830.00)
    Net Income 20,874.07

    Actual Applied Variance


    Factory Overhead Control 35,900.00 31,400.00 4,500.00
    WIP (Units)
    1,200.00 20,400.00

    WIP (Peso)
    4,070.00 79,430.00
    79,800.00
    4,440.00

    under applied

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