Managerial Accounting

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The following data pertains to the job order projects of Le Queen Corporation.

	ESTIMATED	ACTUAL
Manufacturing Overhead (in Pesos)	1,657,500.00	2,063,875.00
Direct Labor Hours	6,500.00	7,505.00
Direct Labor Cost (in Pesos)	1,625,000.00	1,988,825.00

Assume that Le Queen uses direct labor hours as allocation base for its predetermined overhead rate, determine the following.

1. Predetermined overhead rate =
2. Amount of overhead applied =

The following data pertains to the job order projects of Le Queen Corporation.

	ESTIMATED	ACTUAL
Manufacturing Overhead (in Pesos)	1,775,500.00	2,076,250.00
Direct Labor Hours	6,700.00	7,550.00
Direct Labor Cost (in Pesos)	1,686,725.00	2,024,070.00

Assume that Le Queen uses direct labor cost as allocation base for its predetermined overhead rate, determine the following.

1. Amount of overhead applied =
2. Amount of under(over)applied overhead =

For requirement 2, follow the format xx,xxx.xx OVERAPPLIED or xx.xxx.xx UNDERAPPLIED - as in 2,500.00 OVERAPPLIED for example.

Le Queen uses a predetermined overhead rate of P 176 per direct labor hour and a direct labor rate of P 554 per hour.

For the period 2021, the following actual costs were incurred related to Division Eva:

Actual Direct Labor Hours - 5,880 hours

Actual Direct Material Cost - P 4,890,250.00

Actual Manufacturing Overhead - P 1,050,950.00

Determine the following:

1. Amount of overhead applied =
2. Amount of under(over)applied overhead =
3. Total manufacturing cost of Division Eva =

For requirement 2, follow the format xx,xxx.xx OVERAPPLIED or xx.xxx.xx UNDERAPPLIED - as in 2,500.00 OVERAPPLIED for example.

For 2021, Le Queen Corporation reported P 870,000 actual manufacturing overhead for Division Eva. Applied overhead was P 945,000.00

Accordingly, year-end balances were reported for the following accounts: Work-in-Process - P 2,535,000; Cost of Goods Sold - P 2,112,500; and Finished Goods - P 3,802,500.00

Required:

1. Determine the effect to cost of goods sold if the underapplied or overapplied overhead is directly closed to Cost of Goods Sold at the end of the period. =
2. Determine the effect to gross margin if the underapplied or overapplied overhead is closed to Cost of Goods Sold, Work-in-Process, and Finished Goods according to the accounts' year-end balances at the end of the period. =

Indicate whether increase or decrease - such as xx,xxx.xx INCREASE or xx,xxx.xx DECREASE, as in 2,500.00 INCREASE.