Stanley Company Applies Overhead Based on Machine Hours Required:
A) Compute the Budgeted Factory Overhead Rate

question 13

Essay

Stanley Company applies overhead based on machine hours.The following data was available:
$$\begin{array} { l l } \text { Budgeted factory overhead costs}&\$280,000 \\ \text {Budgeted machine hours }&\$20,000 \\ \text {Actual factory overhead costs }&\$292,000 \\ \text {Actual machine hours }&\$19,050 \\ \text {Cost of goods sold }&\$560,000 \\ \text { Direct materials inventory, ending balance }&\$ 60,000\\ \text {Work-in-process inventory, ending balance }&\$190,000 \\ \text { Finished goods inventory, ending balance}&\$ 250,000\\\end{array}$$
Required:
A) Compute the budgeted factory overhead rate.
B) Compute the underapplied or overapplied factory overhead.
C) Under the immediate write-off approach to overhead variances, how would you dispose of the overhead variance?
D) If the immediate write-off approach to overhead variances is not used, how would you dispose of the overhead variance?

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Definitions:

Person-Environment Fit

The degree to which individual characteristics match with aspects of the environment, affecting well-being and performance.

Vocations

Occupations to which a person is specially drawn or for which they are suited, trained, or qualified.

Knowledge Work

Tasks that primarily involve processing, analyzing, and manipulating information, often requiring high levels of expertise and mental effort.

Manufacturing Job

A position in a company or industry focused on the production of goods through the use of machinery, tools, and labor.