Zain Corporation applies overhead based upon machine-hours. Budgeted factory overhead was $292,500 and budgeted machine-hours were...

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Zain Corporation applies overhead based upon machine-hours. Budgeted factory overhead was $292,500 and budgeted machine-hours were 19,500. Actual factory overhead was $287,920 and actual machine-hours were 19,050. Before disposition of under/overapplied overhead, the cost of goods sold was $560,000 and ending inventories were as follows: Direct materials $ 60,000 WIP 190,000 Finished goods 250,000 Total $500,000 Instructions: 1. Determine the budgeted factory overhead rate per machine-hour. (2 marks) 2. Compute the over/underapplied overhead. (2 marks) 3. Prepare the journal entry to dispose of the variance using the write-off to cost of goods sold approach. (3 marks) 4. Prepare the journal entry to dispose of the variance using the proration approach. (3 marks) Zain Corporation applies overhead based upon machine-hours. Budgeted factory overhead was $292,500 and budgeted machine-hours were 19,500. Actual factory overhead was $287,920 and actual machine-hours were 19,050. Before disposition of under/overapplied overhead, the cost of goods sold was $560,000 and ending inventories were as follows: Direct materials $ 60,000 WIP 190,000 Finished goods 250,000 Total $500,000 Instructions: 1. Determine the budgeted factory overhead rate per machine-hour. (2 marks) 2. Compute the over/underapplied overhead. (2 marks) 3. Prepare the journal entry to dispose of the variance using the write-off to cost of goods sold approach. (3 marks) 4. Prepare the journal entry to dispose of the variance using the proration approach. (3 marks)

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1 BUDGETED FACTORY OVERHEAD RATE PER MACHINE HOUR budgeted factory o... View the full answer