Departmental Overhead Rates

Lansing, Inc, provided the following data for its two producing departments:
Molding Polishing Total
Estimated overhead P400,000 P80,000 P480,000
Direct labor hours (expected
and actual)
Form A 1,000 5,000 6,000
Form B 4,000 15,000 19,000
Total 5,000 20,000 25,000

Machine hours:
Form A 3,500 3,000 6,500
Form B 1,500 2,000 3,500
Total 5,000 5,000 10,000

Machine hours are used to assign the overhead of the Molding Departnment,
and direct labor hours hours are used to assign the overhead of the Polishing
Department. There are 30,000 units of Form A produced and sold and 50,000
of Form B

Required:
1. Calculate the overhead rates for each department.
2. Using departmental rates, assign overhead to the products and calculate the
overhead cost per unit. How does this compare with the plantwide rate unit
cots, using direct labor houes?
Activity-Based Product Costinng

Roberts Company produces two weed eaters: basic and advanced. The company
has four activities: machining, engineering, receiving, and inspection. Information
on these activities and their drivers is given below.
Basic Advanced Total
Units produced 100,000 300,000 --
Prime costs P8,000,000 P30,000,000 P38,000,000
Machine hours 100,000 500,000 600,000
Engineeing hours 400 3,600 4,000
Receiving orders 400 1,200 1,600
Inspection hours 800 1,600 2,400

Overhead costs:
Machining P6,000,000
Engineering P2,000,000
Receiving P560,000
Inspecting products P360,000
Required:
1. Calculate the four activity rates.
2. Calculate the unit costs using activity rates. Also, calculate the overhead cost per unit.