Martinez Corporation applies overhead based upon machine-hours. Budgeted factory overhead was $362,000 and budgeted machine-hours were...

Martinez Corporation applies overhead based upon machine-hours. Budgeted factory overhead was $362,000 and budgeted machine-hours were 24,000. Actual factory overhead was $393,000 and actual machine-hours were 27,000. Before disposition of under/overapplied overhead, the cost of goods sold was $610,000 and ending inventories were as follows:

Direct materials $ 80,000

WIP 200,000

Finished goods 270,000

Total $550,000

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.

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ekkarill92 answered 1 year ago

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