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.
- 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?
D) Prorate the overhead variance to the appropriate accounts.