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Question - Galinganmo Corp has two service departments and two producing departments. The following are data available for the year 2021:
FOH cost
Estimated Labor Hrs
Area Occupied
Maintenance
P129,000
2,900
1,200
Security
105,000
1,100
1,500
Cutting
416,000
2,000
1,900
Assembly
380,000
1,600
3,200
The maintenance costs are allocated based on estimated labor hours and security is allocated based on space occupied. The producing department uses machine hours with 50,000 for cutting and 25,000 for assembly to determine the factory overhead rate.
Required -
1. Using the step method, what is the factory overhead rate of the cutting department?
a. P10.54
b. P8.32
c. P20.35
d. P10.43
2. Using the reciprocal method, the applied factory overhead of the assembly department if it used 24,700 machine hours is closest to:
a. P498,693
b. P259,350
c. P502,645
d. P497,211
e. None of the above
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