Reference no: EM132768905

Service departments (total estimated costs)

Building and ground maintenance P 21,960.40

Storeroom 15,990.00

Producing departments (estimated factory overhead costs)

Department A 42,000.00

Department B 51,000.00

                                                    Est. DL Hrs.               Est. Sq. Ft.           No. of Requisitions

Bldg. and ground maintenance      750                               150

Storeroom                                   130                            40

Department A                                 1,925                    890                      2,500

Department B                             1,200                     2,330                     1,400

The base to be used for allocating the cost of Building and ground maintenance is square feet and for the storeroom cost is the number of requisition. Direct labor hours are used to compute the producing departments' factory overhead application rate

Problem 1. Using the direct method, what is Department A's factory overhead rate?

a. P 30.30

b. P 47.46

c. P 55.70

d. P 60.53

Problem 2. Using the algebraic method, compute for the building and Grounds Maintenance Department total amount to be allocated to the Storeroom Service Department and both producing departments. (Take all calculations of hour decimal places but round all answers to the nearest peso)

a. P 21,960

b. P 22,584

c. P 23,467

d. P 24,722