Info icon This preview shows pages 1–2. Sign up to view the full content.

1. The following information was gathered for Elliott Company: Budgeted direct-labor hours 75,000 Actual direct-labor hours 77,500 Budgeted factory overhead $562,500 Actual factory overhead $538,000 Assume that direct-labor hours is the cost driver. Compute: a. Budgeted factory-overhead rate b. Factory overhead applied c. Amount of over/underapplied overhead Answer: a. $562,500 / 75,000 hours = $7.50 per hour b. $7.50 x 77,500 hours = $581,250 c. $538,000 - $581,250 = $43,250 overapplied 2. Jones Corp. uses a budgeted factory-overhead rate to apply overhead to production. The following data are available for the year: Budgeted factory overhead $675,000 Actual factory overhead $726,000 Budgeted direct-labor costs $450,000 Actual direct-labor costs $482,000 End of year balances are as follows: Materials inventory $120,000 WIP inventory $100,000 Cost of goods sold $150,000 Finished goods inventory $250,000 Required: a. Determine the budgeted factory-overhead rate based on direct-labor costs. b. What is the applied overhead based on direct-labor costs? c. What is the overhead variance?
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 2
This is the end of the preview. Sign up to access the rest of the document.
  • Fall '15
  • Quality control department, hot dogs, Elliott Company

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern