The following info was available for Jones Southwest Corp. for the year ended 12
ID: 2389228 • Letter: T
Question
The following info was available for Jones Southwest Corp. for the year ended 12/31/07:Item Amount
Budgeted Direct labor Cost 550,000
Actual Direct Labor Cost 582,000
Budgeted Factory Overhead 775,500
Actual Factory Overhead 826,000
Certain ends of year balances are as follows:
Item Amount
Raw Material Inventory 150,000
Work in Process Inventory 150,000
Finished Goods Inventory 300,000
Cost of Goods Sold 200,000
If the company uses direct labor cost to allocate overhead, compute the overhead applied.
Explanation / Answer
1.Budgetd Direct labor 550,000 Actual Direct Labor 582,000 Here total direct labor varience (582,000 - 550,000) = 32,000 Favorable Budgeted Factory overhead 775,500 ACtual Factory overhead 826.000 Here the total Factory overhead (826,000-775,500) = 50,500 Computation of overhead applied : Overhead applied in Raw materialWork in process 150,000 18.75% Overhead applied in WIP goods 150,000 18.75% Overhead applied in finised goods 300,000 37% Overhead applied in Cost of goods sold 200,000 25% ____________________ Total overhead applied 800,000 ___________________ Overhead applied in Raw materialWork in process 150,000 18.75% Overhead applied in WIP goods 150,000 18.75% Overhead applied in finised goods 300,000 37% Overhead applied in Cost of goods sold 200,000 25% ____________________ Total overhead applied 800,000 ___________________Related Questions
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