Review the Enriquez illustration. Suppose Enriquez had sales in 20X0 of €5,000,000. There were no beginning or ending inventories. That is, Enriquez sold everything it produced in 20X0.
The company used the budgeted factory-overhead rates on p. 583. Production in 20X0 required 85,000 machine hours in machining and €260,000 direct-labour cost in assembly. The materials used in 20X0 cost €2,400,000, and the total direct-labour cost was €490,000. Actual factoryoverhead cost was €455,000. Prepare an income statement for 20X0 through the gross profit line. Include a separate line for the immediate write-off method for overapplied or underapplied overhead.