Waterworks, Inc. makes plastic water bottles that are used by various beverage makers.
Demand for bottles was so high during the year that the company made 255,000 bottles, 15,000 more than budgeted. Bottles are made in batches of 100, and the standard amount of machine time to make one batch of bottles is 1 hour. During the year, $38,250 of variable overhead cost was applied to Work in Process Inventory. Actual variable overhead cost incurred was $40,000, and 2,600 machine hours were used.


a. Prepare the journal entry to record actual variable overhead costs incurred.
b. Prepare the journal entry to record the application of variable overhead to production.
c. Prepare the journal entry to record the variable overhead spending and efficiency variances.

  • CreatedFebruary 21, 2014
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