Problem VII Overhead Budgeting see attach file! Jones Corporation uses a budgeted factory overhead rate to apply overhead to production. Direct labor costs are the cost driver for overhead cos

Problem VII – Overhead Budgeting

see attach file!

Jones Corporation uses a budgeted factory overhead rate to apply overhead to production. Direct labor costs are the cost driver for overhead costs. The following data are available for the year ending, December 31, 2010:

Budgeted factory overhead $675,000

Actual factory overhead $726,000

Budgeted direct labor costs $450,000

Actual direct labor costs $482,000

Cost of goods sold $150,000

Direct materials inventory, December 31, 2010 $120,000

Work-in-process inventory, December 31, 2010 $100,000

Finished goods inventory, December 31, 2010 250,000

Required:

A) Compute the budgeted factory overhead rate

B) Compute the applied overhead costs

C) What is the overhead variance

Please show your work step by step!

ATTACHMENT PREVIEW

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Problem VII – Overhead Budgeting
Jones   Corporation   uses   a   budgeted   factory   overhead   rate   to   apply   overhead   to 
production. Direct labor costs are the cost driver for overhead costs. The following 
data are available for the year ending, December 31, 2010:
Budgeted factory overhead
$675,000
Actual factory overhead
$726,000
Budgeted direct labor costs
$450,000
Actual direct labor costs
$482,000
Cost of goods sold
$150,000
Direct materials inventory, December 31, 2010
$120,000
Work-in-process inventory, December 31, 2010
$100,000
Finished goods inventory, December 31, 2010
250,000
Required:
A)
Compute the budgeted factory overhead rate
B)
Compute the applied overhead costs
C)
What is the overhead variance
Please show your work step by step!

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