Indooroopilly Corporation Applies Overhead Based Upon Machine-Hours Required
A

question 77

Essay

Indooroopilly 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:
$$\begin{array} { l r } \text { Direct materials } & \$ 60000 \\\text { WIP } & 190000 \\\text { Finished goods } & \underline { 250000 } \\\text { Total } & \underline { \$ 500000}\end{array}$$
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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Definitions:

Normative Ethics

A branch of ethics concerned with setting standards or norms for actions, deciding what is right and wrong.

Metaethics

The branch of ethics that seeks to understand the nature, scope, and meaning of moral judgment and language.

Ethical Pluralism

The belief that there can be multiple correct moral standpoints, and no single ethical perspective should dominate moral reasoning or policy-making.

Single Truth

The concept that there is only one correct or true answer or interpretation to a question or problem.