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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.
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