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Cost Analysis for Gorotex Partnership

The document provides costing data for the Gorotex partnership and Lean Enterprise. For Gorotex, actual costs were ₱373,000, the predetermined overhead rate was ₱54.23, and normal costs were ₱10,303,700. For Lean Enterprise, actual costs were ₱185,000, the predetermined overhead rate was ₱40.00, and normal costs were ₱3,200,000. Both companies calculated actual costs, predetermined overhead rates, and normal costs in the same manner using direct labor hours, materials, overhead, and fixed and variable costs.

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Mark Lana
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318 views2 pages

Cost Analysis for Gorotex Partnership

The document provides costing data for the Gorotex partnership and Lean Enterprise. For Gorotex, actual costs were ₱373,000, the predetermined overhead rate was ₱54.23, and normal costs were ₱10,303,700. For Lean Enterprise, actual costs were ₱185,000, the predetermined overhead rate was ₱40.00, and normal costs were ₱3,200,000. Both companies calculated actual costs, predetermined overhead rates, and normal costs in the same manner using direct labor hours, materials, overhead, and fixed and variable costs.

Uploaded by

Mark Lana
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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GOROTEX PARTNERSHIP

Direct Materials 152,000


Manufacturing Overhead 31,000
Fixed Cost 2,500,000
Variable Cost per Direct Labor Hours (DLH) 35
Budgeted Annual Direct Labor Hours (DLH) 130,000
Actual Direct Labor Hours Utilized 190,000

Actual Cost ₱ 373,000


Predetermined Overhead Rate ₱ 54.23
Normal Cost ₱ 10,303,700

The data above shows how the Gorotex partnership identified the following data. The Actual cost by
getting the sum of Actual Direct Labor hours utilized, direct Materials and Manufacturing overhead.
Predetermined Overhead rate can be computed by identifying the budgeted manufacturing overhead, it is
the sum of fixed cost and budgeted annual DLH multiplied by variable cost per DLH. Normal Cost are
simply the product of predetermined overhead rate and Actual direct labor hours utilized.

Lean Enterprise
Indirect Labor Hours Utilized 180,000
Direct Materials 95,000
Manufacturing Overhead 10,000
Fixed Cost 1,000,000
Variable Cost per Direct Labor Hours (DLH) 20
Budgeted annual Direct Labor Hours (DLH) 50,000
Actual Direct Labor Hours utilized 80,000

Actual Cost ₱ 185,000


Predetermined Overhead Rate ₱ 40.00
Normal Cost ₱ 3,200,000
The data above shows how lean enterpise compputed the Actual cost by getting the sum of Actual Direct
Labor hours utilized, direct Materials and Manufacturing overhead. Predetermined Overhead rate can be
computed by identifying the budgeted manufacturing overhead, it is the sum of fixed cost and budgeted
annual DLH multiplied by variable cost per DLH. Normal Cost are simply the product of predetermined
overhead rate and Actual direct labor hours utilized.

LANA, CHABELITA A. BSBA 2A COSTING

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