7.

Problem 3 (16%) Peter Company manufactures two products, Product A and Product B. Peter adopts a simple job costing system and uses normal costing system to compute the cost of each product. A single pre-determined plant-wide overhead rate is used based on direct labor hours as cost allocation base. The company estimated it would incur $500,000 in manufacturing overhead costs. The Actual manufacturing overhead is $520,000. The followings are some relevant information for Peter Company: Product A Product B $10 $20 Direct material cost per unit (Actual) Direct labor cost per unit (Actual) $15 $18 Actual Direct labor hours to produce 1 unit 5 hours 2 hours Budgeted number of units produced 12,000 units 20,000 units Total Budgeted direct labor hours 60,000 hours 40,000 hours Total Actual direct labor hours 55,000 hours 50,000 hours Required: (Put your answers in the empty spaces provided after each question) Contd Problem 3 compute the over- or under allocated manufacturing overhead for Peter Company. (3%) 4. Determine the unit product cost of EACH product for the current year under the simple costing system. (6%)