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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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