Transcribed Image Text: The Ladyfinger Manufacturing Company has two production departments (fabrication and assembly) and three

Transcribed Image Text: The Ladyfinger Manufacturing Company has two production departments (fabrication and assembly) and three
service departments (factory administration, factory maintenance, and factory cafeteria). A summary of costs
and other data for each department prior to allocation of service department costs for the year ended June 30,
2011, appears below. The costs of the factory administration department, factory maintenance department, and
factory cafeteria department are allocated on the basis of direct labor hours, square footage occupied, and
number of employees, respectively.
Factory
Fabrication Assembly Administration Maintenance
Factory
Factory
Cafeteria
Actual Direct Labor Costs
Actual Direct Materials Costs
P1,950,000 P2,050,000
3,130,000
950,000
Estimated Factory OH Costs
Before allocation
1,650,000
562,500
1,850,000
P160,000
P203,200
P240,000
Direct labor hours
Number of employees
Square footage occupied
437,500
31,000
27,000
42,000
20
280
200
12
8
88,000
72,000
1,750
2,000
4,800
Assuming that Ladyfinger elects to distribute service department costs to other service departments, as well as
the production departments (starting with the service department with the greatest total costs), determine the
applied factory þverhead rate of Fabrication Department using direct labor hours of 562,500 as the basis.

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