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Problem 1. DICK O. QUILALA and DINA L.

AMAN are workers of DIPAALAM Company who are involve in

forming the parts needed in one of its products. DICK O. QUILALA and DINA L. AMAN received P75 and P80
per hour respectively during regular hours. DIPAALAM Company pays its employee, time and a half for all the
overtime works in excess of the 48 hours per week.
Required: Compute for the Wages allocated to (a) Direct Labor, and Wages allocated to (b) Factory overhead
1) In a given week, DICK O. QUILALA and DINA L. AMAN works for 50 hours and 53 hours
respectively, and that DICK O. QUILALA is idle for 3 hours.
2) In another week, DICK O. QUILALA and DINA L. AMAN works 52 hours and 51 hours respectively,
and that DINA L. AMAN is idle for 2 hours. Overtime works are due to rush nature of Job.
Problem 2. Management of the Von Machine Company provided you the following information related to payment
scheme of the worker of Product A:
 The hourly rate is P90.00 which calls for standard production per hour of 30 units
 Any production in excess of 240 units in an 8-hr work is paid at P2.5 per unit
 Ten pieces of Part X are required for one unit of Product A. The plant works a 6-day week and an 8-hour day,
totaling 48 hours per week. No overtime premium pay is to be considered in your analysis.
During a selected week, the following pieces of Part X were produced:
Day 1 2 3 4 5 6
Part X Produced 150 200 240 180 300 200
a) In the given week compute for (1) the total earnings of the employee, and (2) the unit labor cost of Product A.
b) Using the information in Problem 2, except that the employee is paid at P3.00 per unit with a minimum hourly rate
of P65.00. Compute for (1) the total earnings of the employee and (2) the unit labor cost of Product A.
Problem 3: Walo Widget Inc. is in the process of completing labor negotiations for the coming year. Part of
these negotiations call for an increase in the base wage rate for direct labor from P10 to P12 per hour, with a
corresponding increase in fringe benefits. At present, fringe benefits amount to 35% of total wages, and this
percentage will remain unchanged with the new contract. The present labor standards call for 8 direct labor
hours per unit of output. Other conversion costs amount to P40 per unit, of which 75% is for variable costs.
Materials costs amount to P8 per unit. Administrative costs are fixed and amount to P10 per unit at the
present production level. Products are sold with a gross margin of 30% on sales.
(1) Compute the current selling price of a unit of output.
(2) Compute the new selling price to be charged if there is no increase in productivity as a result of the new
labor contract.
(3) Compute the selling price to be charged if the new labor contract were accompanied by a 20% increase in
Problem 4: The Laborer Corporation uses an hourly wage system. The contract provides for a 5-day week, with time and one half for all work over eight
hours in regular working day, double time for Saturday and Sunday. Deductions from workers earnings are: SSS, Withholding taxes, Philhealth and HDMF at
5%, 20%, 1% and 2% respectively.

The time records for the week show the following information:
Name Card No. Mon Tue Wed Thu Fri Sat Rate
LLL 101 8 8 10 10 8 4 P80
AAA 102 8 8 10 9 8 P60
BBB 103 8 8 10 10 8 P55
OOO 104 8 9 8 10 10 4 P55
RRR 105 10 8 10 10 9 4 P60

An analysis of the job time ticket for the week indicated the following:
Card No. Job No. Mon Tue Wed Thu Fri Sat
101 -----------------------Supervision-----------------------------
102 1 8 4 6 3 -
2 - 3 4 2 2
3 - - - 4 6
103 1 6 6 4 4 2
3 2 - 5 6 4
104 2 5 5 3 2 -
3 2 4 3 7 8 4
105 1 8 6 6 4 -
2 - 2 3 4 8 4
From the forgoing information compute the following:
a. Regular Pay
b. Overtime Premium
c. Total Deduction
d. Net Pay
e. Direct labor cost charged to each Job
f. Indirect Labor cost charged to FOH-C

Canelli Products Co. presents the following data related to June production:

Item 100% Budget 80% Budget Actual

Materials P 30,000 P 24,000 P 23,600
Labor 60,000 48,000 52,500
Factory overhead 280,000 250,000 252,500
P 370,000 P 322,000 P 328,600
Item 100% Budget 80% BudgetActual
Direct labor hours 5,000 4,000 4,200
Labor rate -- -- P12.50
Production in units 2,500 2,000 2,000
Compute for the Factory Overhead Rate and the under or over applied overhead under 95% budget
and that the overhead base is: 1) Direct Material Cost, 2) Direct Labor Cost, 3) Direct Labor Hours, and
4) Unit of Production.

Perry Company has two service departments, Maintenance and Human Resources, and two production departments,
Machining and Assembly. The following data have been estimated for next year’s operations:
Department: Direct Square Machine Labor
Charges Footage Hours Hours
Human Resources P135,000 1,000 -- --
Maintenance 100,000 -- -- 5,000
Machining 275,000 2,000 25,000 20,000
Assembly 225,000 3,000 1,000 25,000

The Human Resources Department services all departments.

Required: Compute for the OH rate using a) Direct Method, b) Step Method and c) Algebraic Method.