Wang's Corporation Applies Overhead Based Upon Machine-Hours Required:
A

question 86

Essay

Wang's Corporation applies overhead based upon machine-hours.Budgeted factory overhead was $325,000 and budgeted machine-hours were 13,000.Actual factory overhead was $312,330 and actual machine-hours were 12,660.Before disposition of over- or underapplied overhead,the cost of goods sold was $725,000 and ending inventories were as follows:
$$\begin{array} { | l | r | } \hline \text { MIP } & \$ 150,000 \\\hline \text { Finished goods } & \underline { 375,000 } \\\hline \text { Total } & \$ 525,000 \\\hline\end{array}$$
Required:
a.Compute the amount of overhead applied to production.b.Prepare the journal entry to dispose of the over/under-applied overhead using the write-off to cost of goods sold approach.c.Prepare the journal entry to dispose of the over/under-applied overhead using the proration approach.

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