Problem - 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.