Author Question: Schulz Corporation applies overhead based upon machine-hours. Budgeted factory overhead was $266,400 ... (Read 93 times)

drink · **on:** Mar 6, 2021

Schulz Corporation applies overhead based upon machine-hours. Budgeted factory overhead was $266,400 and budgeted machine-hours were 18,500. Actual factory overhead was $287,920 and actual machine-hours were 19,050. Before disposition of under/overapplied overhead, the cost of goods sold was $560,000 and ending inventories were as follows:

Direct materials

$ 60,000

WIP

190,000

Finished goods

250,000

Total

$500,000

Required:
a. Determine the budgeted factory overhead rate per machine-hour.
b. Compute the over/underapplied overhead.
c. Prepare the journal entry to dispose of the variance using the write-off to cost of goods sold approach.
d. Prepare the journal entry to dispose of the variance using the proration approach.

fwbard · **Reply #1 on:** Mar 6, 2021

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