Reference no: EM132740709

Theoretical capacity for Rolly Company is 80,000 direct labor hours, and normal capacity is 50,000 direct labor hours. The actual capacity attained for the fiscal year ended June 30, 2020 was 43,000 hours. It is estimated that 40,000 hours will be worked in 2021. Fixed Factory Overhead is P400,000 and variable factory overhead is P6.69 per direct labor hour.

Required:

Problem (a) Using the normal capacity, compute (a) the factory overhead rate, and (b) the fixed part of the factory overhead rate

Problem (b) Using expected actual capacity for 2021, compute (a) the factory overhead rate, and (b) the fixed part of the factory overhead rate.