Arctic Construction assembles residential houses. It uses a job-costing system with two direct-cost categories(direct materials and direct labor) and one indirect-cost pool (assembly support). Direct labor-hours is theallocation base for assembly support costs. In December 2006, Arctic budgets years 2007 assembly support coststo be P8,000,000 and year 2007 direct labor-hours to be 160,000.

At the end of 2007, Arctic is comparing ,the costs of several jobs that were started and completed in 2007.

L Model M Model

Construction period Feb - June 2007 May - Oct 2007

Direct materials 106,000 127,604

Direct labor 36,276 41,410

Direct labor-hours 900 1,010

Direct materials and direct labor are paid for on a contract basis. The costs of each are known when directmaterials are used or direct labor-hours are worked. The 2007 actual assembly support costs were P6,888,000,and the actual direct labor-hours were 164,000.

43 What is the budgeted indirect-cost rate?

44 What is the actual indirect-cost rate?

45 What is the job cost of the L Model using normal costing?

46 What is the job cost of the M Model using actual costing?